Employee or Independent Contractor
Many homeowner association boards utilize the services of maintenance providers, classifying them’ as independent contractors when they should be classified as employees. The risk of misclassifying a worker can be catastrophic for an association. The risks are based on new laws and include: 1) Being forced to pay unpaid overtime; 2) Being forced to pay unpaid employer payroll taxes; 3) Being forced to pay Workers’ Compensation Insurance premiums retroactively; 4) Being forced to pay vacation benefits, paid leave benefits, and possibly other employee benefits; 5) Being forced to pay penalties and interest; 6) Being subjected to a possible’ lawsuit by one or more homeowners for negligence; and 7) Being subjected to an audit by the State of California, and/or the Franchise Tax Board.
In summation, it is highly dangerous to hire individuals without classifying them as employees. Associations are strongly urged to place individuals on payroll either directly or through their management company. See: HOAs – Say Goodbye to Independent Contractors.