How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask socrateaser Your Own Question

socrateaser
socrateaser, Lawyer
Category: California Employment Law
Satisfied Customers: 34180
Experience:  Retired (mostly)
10097515
Type Your California Employment Law Question Here...
socrateaser is online now
A new question is answered every 9 seconds

Are there any laws or regulations that prohibit a long-term

Resolved Question:

Are there any laws or regulations that prohibit a long-term consultant sitting on the senior management board and participating in daily operational activities from supervising, hiring and firing employees for his client?

The contractor fits the legal understanding of 'independent contractor' according to California and IRS guidelines.
Submitted: 10 months ago.
Category: California Employment Law
Expert:  socrateaser replied 10 months ago.
Hello,

The short answer to your question is, "no." There is no prohibiting law.

The U.S. Supreme Court has approved a six-factor test to determine whether or not a corporate director is an independent contractor or employee (Clackamas Gastroenterology Associates, PC v. Wells, 538 US 440, 449-450):

  • Whether the organization can hire or fire the individual or set the rules and regulations of the individual's work [450]
  • Whether and, if so, to what extent the organization supervises the individual's work
  • Whether the individual reports to someone higher in the organization
  • Whether and, if so, to what extent the individual is able to influence the organization
  • Whether the parties intended that the individual be an employee, as expressed in written agreements or contracts
  • Whether the individual shares in the profits, losses, and liabilities of the organization.

 

The factors described above were originated as part of a determination of corporate liability for purposes of unlawful employment discrimination. The point, however, is important because the Clackamas case shows that there is no law prohibiting an independent contractor from sitting on a corporation board. The issue is simply whether or not the contractor is in fact an independent contractor, rather than an employee.

 

Please let me know if my answer is helpful. And, thanks for using justanswer.com!

Customer: replied 10 months ago.


Thank you. That absolutely clarifies the first part regarding sitting on the Executive Board (Senior Management Committee), which might imply the answer to the second part, but I would like explicit confirmation regarding the "supervising, hiring and firing" of employees.


 


The situation is that an IT consultant was brought in to a company that had no internal IT resources. The consultant was eventually offered a position on the Executive Board. The consultant eventually over saw the hiring of IT employees for his client. This expanded into a position where the IT consultant actually supervising the employees that worked for the client, not the consultant.


 


The question has arisen as to whether the consultant or the client is at risk of violating labor laws.


 


It seems like your answer would suggest that they are not, but I would just like to see the answer stated in concrete terms.


 


Thank you for your time.

Expert:  socrateaser replied 10 months ago.
The consultant is not personally violating any labor law. However, the corporation may be violating the Labor Code and the Unemp. Ins. Code, because if the consultant has the power to hire and fire corporation employees, then the consultant is an employee, not an independent contractor -- and the corporation must pay the consultant wages/salary and withhold payroll tax.

A corporation can act only through its individual employees. Moore v. Phillips (1959) 176 Cal. App.2d 702, 709 [1 Cal. Rptr. 508].

A director, who is not an employee, has no power to direct the day-to-day activities of the corporation. Only an officer/employee has such power. Thus, if the consultant is engaged in hiring and firing, the consultant is either acting as an officer/employee, or the consultant's decisions are merely advisory, and have no legal force or effect, until a corporate officer actually makes the order concerning hiring or firing.

Hope this helps.
socrateaser, Lawyer
Satisfied Customers: 34180
Experience: Retired (mostly)
socrateaser and other California Employment Law Specialists are ready to help you

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • Mr. Kaplun clearly had an exceptional understanding of the issue and was able to explain it concisely. I would recommend JustAnswer to anyone. Great service that lives up to its promises! Gary B. Edmond, OK
< Last | Next >
  • Mr. Kaplun clearly had an exceptional understanding of the issue and was able to explain it concisely. I would recommend JustAnswer to anyone. Great service that lives up to its promises! Gary B. Edmond, OK
  • My Expert was fast and seemed to have the answer to my taser question at the tips of her fingers. Communication was excellent. I left feeling confident in her answer. Eric Redwood City, CA
  • I am very pleased with JustAnswer as a place to go for divorce or criminal law knowledge and insight. Michael Wichita, KS
  • PaulMJD helped me with questions I had regarding an urgent legal matter. His answers were excellent. Three H. Houston, TX
  • Anne was extremely helpful. Her information put me in the right direction for action that kept me legal, possible saving me a ton of money in the future. Thank you again, Anne!! Elaine Atlanta, GA
  • It worked great. I had the facts and I presented them to my ex-landlord and she folded and returned my deposit. The 50 bucks I spent with you solved my problem. Tony Apopka, FL
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
 
 
 

Meet The Experts:

 
 
 
  • LawTalk

    Attorney

    Satisfied Customers:

    933
    I have 30 years of experience in the practice of law, including employment law and discrimination law.
< Last | Next >
  • http://ww2.justanswer.com/uploads/LA/LawTalk/2012-6-6_17379_LawTalk.64x64.JPG LawTalk's Avatar

    LawTalk

    Attorney

    Satisfied Customers:

    933
    I have 30 years of experience in the practice of law, including employment law and discrimination law.
  • http://ww2.justanswer.com/uploads/MU/multistatelaw/2011-11-27_173951_Tinaglamourshotworkglow102011.64x64.jpg Tina's Avatar

    Tina

    Attorney

    Satisfied Customers:

    857
    JD, 16 years experience & recognized by ABA for excellence in employment law.
  • http://ww2.justanswer.com/uploads/PI/PIExpert/2012-7-1_152453_Attorney.64x64.jpg Brandon, Esq.'s Avatar

    Brandon, Esq.

    Lawyer

    Satisfied Customers:

    332
    Has received a certificate of recognition from the California State Senate for his outstanding legal service.
  • http://ww2.justanswer.com/uploads/PH/phoenixrising119/2012-7-26_11214_043.64x64.jpg melissamesq's Avatar

    melissamesq

    Attorney

    Satisfied Customers:

    47
    Represent clients to maximum recovery in employment cases.
  • http://ww2.justanswer.com/uploads/IG/Iggy1001/2013-11-20_23344_JApic.64x64.jpg Joseph's Avatar

    Joseph

    Lawyer

    Satisfied Customers:

    3511
    Extensive experience representing employees and management
  • http://ww2.justanswer.com/uploads/JK/jkiani22/2013-11-18_15348_JacobKiani1copy2.64x64.jpg jkiani22's Avatar

    jkiani22

    Attorney

    Satisfied Customers:

    24
    Attorney
  • /img/opt/shirt.png Legal Counsel's Avatar

    Legal Counsel

    Lawyer

    Satisfied Customers:

    32
    California Licensed Attorney- 29 years- Wages, Hours, Overtime, Discrimination, Wrongful Termination.