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PBL -Part B
One of your clients, Carole King, is a licensed real estate agent she works for REMAX, a real estate agency. Carole seeks your assistance in determining whether she is an employee or independent contractor
- Carole asks you to prepare a detailed checklist outlining the criteria that will assist her in determining whether she is an employee or an independent contractor of REMAX Students should come up with a minimum of 10 specific criterial/factors which would be indicative of whether a person is regarded as an employee or independent Contractor.
- Based on this checklist, please write a brief letter to Carole advising her as to whether you believe she is an employee or independent contractor (and the primary reasons thereof). Please refer to all relevant references used to support your answer.
In the present case it is noted that the employee status of the independent workers or the employee of the organization, has to be recognized. However, as per the present analysis, the criteria is blurred. In this sense following points which appear vague are (Australian taxation office, 2018):
- The contract stating independent contractor is not signed by either party, and the contract nature is conditioned.
- Further the client in question cannot engage with other companies while working with the said company.
- She is also supposed to pays fix fee each month for the functioning of REMAX.
- The employee has tax deduction of 40% from her income which is inclusive of GST
Meanwhile, the criteria determining her status as an independent contractor are as follows (Australian taxation office, 2018):
- The contractor issue invoice to the company
- The contractor runs an independent business, must as the client at present
- The contractor does not bear any risk to the financial aspects of the company, and chose the working hours as per their consideration, which is evident here as well
- There is no direct supervision to the work of the employee by the company or any of its members
- The contractor is not prevented from delegating their work to other people
- The employee is not expected to be a part of any training in lieu of paying any duty to the company
- There is no representation of the employee as a member of the company
- The company does not require the employee to wear a uniform
- The ongoing expectation of the work is vague, and no specific details of the contract end date is shared
- There are no leave entitlements to the client
Through the present scenario it is evident that predominately the client is functioning as an independent contractor, yet, there are certain aspects of the contract which they must negotiate to avoid any conflict later.