Employee or Independent Contractor?

When is an employee considered an independent contractor? The Court of Appeals re-visited this issue on June 8 in Reed v. Yackell.

The analysis begins with

the statute. "Every person in the service of another, under any contract of hire, express or implied..." is an employee. Furthermore you are an employee if all three of the following conditions are met:

(1) You do not maintain a separate business and,
(2) You do not hold yourself out to and render service to the plublic and,
(3) You are not an employer subject to the comp. act.

If you meet any of the about criteria then you are an independent contractor.

In Reed v. Yackell the court held that Reed was not an employee, and therefore an independent contractor, because only provided assistance on three to five occasions over a five-month period. His assistance was not viewed as an integral part of the alleged employer's business. Further he only received between $35 and $40 each time he assisted the alleged employer and therefore could not have primarily depended upon that payment for a living. Reed held himself out to the public as one who could perform general labor in exchange for payment, since he had assisted the alleged employer on only a few occasions and painted houses for his relatives.

UPDATE***As of January 13, 2005, the Michigan Supreme Court has granted leave to appeal. This means that the Supreme Court, on appeal, could change this law or leave it as is.***