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Beyond the Employer-Employee Relationship: Utilizing Independent Contractors, Leased Employees and Interns

Janet A. Savage, Oil & Gas Agreements: Contracting for Goods, Services, and People (2013)

Most companies employ employees to perform the essential functions of the company's business. Sometimes, however, companies rely upon other types of business relationships in order to serve their business needs. For example, companies sometimes utilize independent contractors for certain types of services. It is important that a company appropriately rely upon independent contractors because if a company characterizes and treats an individual as an independent contractor--but the individual is found to be an employee by a court or government agency--there can be various negative ramifications for the company. This paper therefore will focus primarily on independent contractors, including a discussion of the different standards applied by federal and state agencies to determine whether indeed an individual is an independent contractor, and not an employee. This paper also will discuss other types of business relationships sometimes utilized by companies--namely, leased employees and interns. Finally, this paper will discuss issues that may arise in situations other than the traditional employer-employee relationship, including the joint employment doctrine, the borrowed servant rule, and the law of respondeat superior.

There are a variety of reasons why relying upon individuals other than traditional employees can be attractive to companies. Using independent contractor