Laws That Protect Independent Contractors (Including Work-at-Home Moms)
Whether you are a contract (read: freelance) employee that telecommutes instead of going into the office or you happen to work for several clients while running your own home-based business, there are laws in place to protect your rights. You might not think that certain laws meant to protect regular employees apply to you, and you’re correct; many of them cover only employees who work outside of the home, where they are subject to an environment that is out of their control. So naturally there are laws that protect them from ethical abuses stemming from their situation, or even physical harm caused by the setting, coworkers, or clients. But contractors don’t face many of these potential threats when they work from home, and so they are not covered. However, there are a host of other problems that you may have to contend with, and so there is litigation in place to help you.
For starters, you enjoy the right to get paid. Employers would be in pretty hot water if their regular payroll went askew, but for some reason, corporations often feel that it is acceptable to withhold payment from contractors for months at a time (maybe forever). But this is illegal and you have recourse under law should clients fail to pay you for your work. Of course, you have to have a contract in place in order to ensure these protections. Basically any document that proves the company agreed to pay you a set amount of money for the work specified will hold up as a contract. But you can use a company’s purchase order (for your goods or services) as a contract or even create your own template and fill in the blanks, requiring approval before you begin work. Just be careful when you agree to a client’s pre-made contract; if you don’t understand the legal jargon, have it checked out by your own lawyer before signing on the dotted line.
There are also laws that concern taxation for contract workers. For one thing, you are allowed certain deductions for “business expenses” that full- or part-time employees who work from home (telecommuters) don’t enjoy. You should check with your tax preparer or the IRS to find out what is acceptable (so as not to raise red flags), but if you are paying out of pocket for anything related to conducting business (travel, transportation, electronics and other equipment, communication services, office supplies, and even a home office space) you can probably write it off on your taxes. You can also take advantage or quarterly estimated taxes, which often allow you to pay less while ensuring that there is recorded evidence of expected payment from clients.
Finally, you should know that any intellectual property you create as a contract worker is solely under your ownership, unless you agree otherwise via contract. This means that it can only be used in the ways specified by contract and that you retain the right to use it for other purposes (again, unless specified by contract with the client).
As a contractor, you may never require the services of a workman’s comp, labor rights, or personal injury lawyer, since you won’t be exposed to many of the hazards faced by regularly employed workers in the field. But you still have legal rights that protect you from loss of wages, over-taxation, and theft of intellectual property. Knowing these rights is the first step to ensuring that you are not taken advantage of when you opt to work from home.
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