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Case law recognizes three exceptions to liability for independent contractors: Negligent selecting, instructing, or supervising: This exception goes to whether you adequately vetted and instructed an independent contractor.
The general rule is that an individual is an independent contractor if the payer has the right to control or direct only the result of the work and not what will be done and how it will be done. If you are an independent contractor, then you are self-employed.
In California, an employer is vicariously liable for the negligent and wrongful acts of his employees that are committed within the scope of employment.
How do I create an Independent Contractor Agreement? State the location. ... Describe the type of service required. ... Provide the contractor's and client's details. ... Outline compensation details. ... State the agreement's terms. ... Include any additional clauses. ... State the signing details.
Even given the general rule that an employer is not responsible for the acts of independent contractors, companies are expected to carefully choose who they will use as contract workers. Otherwise, they may be exposed to liability for negligent hiring.
A business may pay an independent contractor and an employee for the same or similar work, but there are important legal differences between the two. For the employee, the company withholds income tax, Social Security, and Medicare from wages paid. For the independent contractor, the company does not withhold taxes.
Negligent Hiring Liability Even given the general rule that an employer is not responsible for the acts of independent contractors, companies are expected to carefully choose who they will use as contract workers. Otherwise, they may be exposed to liability for negligent hiring.
By misclassifying workers as independent contractors, employers shift the financial burden of payroll taxes onto workers that employers ordinarily cover, and they avoid paying workers' compensation and unemployment premiums on workers' behalf.