Hardly a week goes by that I don’t get a question from an IIABNY member regarding the classification of a person working for someone else. The “someone else” is attempting to classify that person as an independent contractor, rather than an employee. Why? Because if that person is not an employee, the person who hires him does not have to provide Workers’ Compensation benefits, Unemployment Insurance, matching Social Security and Medicare taxes, and so on. This fluidity of classification is so common that alarm bells go off in my head whenever I hear the number 1099 (the IRS form used to report miscellaneous income paid to a contractor.)
Sometimes, insurance companies get into disputes with other insurers about whether someone is an independent contractor. Such was the case in a decision handed down by the New York State Supreme Court’s Appellate Division in Rochester earlier this month.