What if...Part 2. You are an employer, and you have independent contractors working for you. A horse is injured, and the owner would like to sue the contractor. BUT...the contractor is really an employee.... see the pickle?
The series continues!! Last time, we pondered about what would happen if you, the Groom, were working as an independent contractor and a horse in your care was hurt. (Quick summary: Yes, you could be held liable if you were negligent. As an independent contractor, you also need to have business insurance to protect yourself from lawsuits. I encourage you to read Part 1 of this topic here).
But What if…. You are really an employee (and do not hold insurance of your own), but your employer has incorrectly classified you as an Independent Contractor?? If a horse in your care were to injure himself, what are the consequences?
I posed this prickly question to Jenn McCabe, an equine lawyer and horsewoman, not to mention former Pony Clubber and event rider! And this is how it could play out……
This happens a lot in the horse industry, as classifying workers as independent contractors (versus employees) can significantly decrease a horse facility’s (employer’s) taxes and insurance expenses. So, to save a little money a horse facility might call you an independent contractor, even if you’re not.
What’s the difference?
Well, typically, it really doesn’t matter what the employer or the worker understood to be the arrangement. Instead, Courts (and the IRS…) will consider a number of factors, but the critical factor in determining employment status is whether the employer had the right to control the manner and means of the work being performed. If so, courts have consistently held that the so-called “independent contractor” is actually an “employee.” For instance, as an equine attorney, individuals and businesses hire me to provide services for them as an independent contractor, since they do have the power to “control” how (the manner and means) I conduct my business. Furthermore, I work for several people/entities, use my own offices and equipment, and manage my own staff. On the other hand, the same individual or business may employ a barn manager, who reports to them, is directed by them, and works for them on a consistent schedule – as an employee under their training and control.
So, how does this play in to the ultimate question: If your employer calls you an independent contractor, but you are really working as a regular employee – what are the consequences if a horse is injured while in your care?
Generally, business owners are liable for their employees’ negligence… but you still may be sued for an accident involving a horse in your care if your employer has incorrectly categorized you as an independent contractor. To avoid this (and the costs associated with defending a lawsuit…), grooms should have all of their business deals in writing – especially employment contracts. You may think that the handshake deal is working for you, but keep in mind that none of my clients planned on filing their lawsuits… or having to respond to one… until they had to. It can happen to you. And it’s important to realize that even where it seems that the court is likely to hold that you were an employee, as opposed to an independent contractor, the expenses involved in bringing a lawsuit to that point just are not worth the risk. Put it in writing!
What about the employer that miscategorized you in the first place, shouldn’t he have some consequences?
Oh, there are consequences, all right! If a court (or the IRS) determines that an employer is falsely calling his employees independent contractors, the employer is likely to be held liable for his employees’ negligence. What’s more, the employer will be held responsible for failing to provide the benefits the employee would have otherwise enjoyed had he been properly classified as an employee (such as workers’ compensation insurance, unpaid overtime, etc). So, in the end, the employer doesn’t save as much money as he thought he would by miscategorizing his employees…. By a long shot!
If you find yourself on the defense side of a dispute like this, or even if you don’t, it would be wise to contact an attorney for advice sooner than later. Planning ahead for potential negative legal repercussions in working as a professional groom is vital to protecting yourself, your reputation, and your future in the industry.
Please feel free to comment here, or if you prefer to remain anonymous you can send you comments to me directly, firstname.lastname@example.org and Jenn and I will respond!
Here's more about Jenn: Jenn McCabe is an equine law attorney whose office provides business consulting and litigation services for the horse industry throughout California. Her office also provides consulting services to out-of-state equine attorneys and other California law firms. Please visit her website at www.CaliforniaHorseLawyer.com for more information.
Disclaimer: The contents of this article are opinion only and based on the experience of the article's author and not to be construed as legal advice in any respect. Consult an attorney before taking action based on the contents of this article. Jenn McCabe, Liv Gude, and Professional Equine Grooms, LLC. expressly disclaim all liability in respect of any actions taken or not taken based on any contents of this article.