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Human Resource Case Study
a summary of the facts of the case: A consultant named John Engineer took a job with "Make-a-Bed," a furniture manufacture that wished to consolidate its three plants. He wasn't hired as a regular employee, but rather as an independent contractor. Engineer was given a year to come up with a strategy to consolidate the company operations in Maryland, Pennsylvania, and Delaware. He was to be paid on an hourly basis, and was expected to put in 20 hours a week.
A year passed and Engineer had not presented his findings and made no recommendations so the company let him go. He filed for unemployment benefits (saying Make-a-Bed was his last employer) and was turned down; Engineer appealed the decision. In the hearing the HR person admitted it had established an automatic payment system -- as it does for regular employees -- not intentionally but by accident, so it contended that John Engineer was in fact not a regular employee; he did not have FICA payments taken out of his check, nor were there health insurance deductions or vacation pay taken out of his checks, a sign that the HR department clearly stated shows Engineer was not entitled to unemployment because he was not a full...
Also in Engineer's case, he was free to make his services available to other businesses, and he did; and the CLR points out that independent workers are free to consult with other companies in addition to the one they have a business association with.
The IRS notes that an independent contractor is not likely to receive "employee-type benefits, such as insurance, a pension plan, vacation pay or sick pay," and Engineer was not offered any of those perks. Also, there was no "permanency of the relationship" in Engineer's case, making it appear that Engineer was not an employee. Also Engineer was not a part of the "regular business activities" of Make-a-Bed, which helps an objective observer see that he was not an employee.
Something that could have swayed the hearing Engineer's way is that…
Works Cited
Internal Revenue Service. (2015). Common-Law Rules / Publication 15A (2015). Retrieved
March 28, 2015, from http://www.irs.gov.
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