In any company, proper employee classification is critical in human resource management. This is because of the legal and cost implications associated with misclassification (Gardner et al., 2013). In some instances, employers find it complex determining a worker as an employee or an independent contractor. This complexity is owed to supervision, control and cost/tax factors, especially when classifying one as an independent contractor. This paper analyzes a case scenario where Dream Massage Company hires a massage therapist as an independent contractor. The independent contractor is subjected to the following terms; her wages are not subject to tax withholding, no employment benefits, works on a set schedule, provides services to the company’s clients using the company’s massage products, and the company exercises full control over how she does her work. Additionally, when she shows up to work on the first day, her employer informs her that her hijab dressing was in violation of the company’s dress policy. This paper thus seeks to find the therapist’s work status and whether Dream Massage was in violation of the employment discrimination laws as well as analyze the ethical considerations in relation to dress policy of a rigid company.
In establishing the worker’s status, it is important to consider the terms the worker is subject to. For one to be classified as an independent contractor, the Internal Revenue Service (IRS) provides a number of factor tests including not taking instructions on how to accomplish a task, not receiving any training but use one’s own methods on job completion, set one’s own work hours and order or sequence in which they perform their work, provide for their own working tools and products, meet their business expenses, meet their self-employment tax obligations and other payments such as social security and risk of liability in case of workplace injury (Stafford, 2016). On the other hand, a worker is an employee if the company reserves the right to control task procedures leading to the desired result, provides employee training, provides all work tools and products, enjoys a continuing relationship with workers, and meets the workers’ compensation and other employment benefits such as overtime, insurance, tax remissions and social security among others. Based on the above descriptions, the massage therapist in the case scenario of Dream Massage is an employee of Dream Massage. This conclusion is informed by the fact that she is given a set work schedule, work tools, and products for the massages, and she works under the supervision and control of the company. The reference as an independent contractor is a misclassification intended for business gains.
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Another issue of contention is whether Dream Massage was in violation of the employment discrimination laws in its relationship with the massage therapist in question. According to Title VII of the Civil Rights Act of 1964, employee discrimination on the basis of race, color, religion, national origin or gender is prohibited. Dream Massage violates this law by restricting the massage therapist from wearing her hijab, a symbol of her religious affiliation as a Muslim woman. This is an act of discrimination on the basis of religion. In Muslim beliefs, hijab is worn by women as a show of conforming to the religious injunction, a sign of respect for God. This discrimination can be considered as harassment to the affected party (Ghumman et al., 2013). Rigid company dress policies should take into consideration the protected traits such as religion, disability, age and pregnancy, and associated dress codes. Therefore, given its ethical consideration, Dream Massage potentially violates employment discrimination laws.
In addition, Dream Massage is in violation of the tax laws for misclassification of the employee as an independent contractor. This misclassification is a blurring strategy to keep the company’s costs low by evading the liability of meeting employee tax and other employment benefits associated with employee status. Limiting the independence of the massage therapist as an independent contractor can be regarded as undermining her as a self-employed professional. According to IRS, Dream Massage’s control over how she does her massage work and further providing the tools and products for her work technically qualifies the therapist as an employee, hence the company should cover her taxes and other benefits. IRS defines an employee as a person who offers services to an employer under which the employer exercises full control over what is done and how it is done. This holds irrespective of the freedom of action given to the employee, but in as long as the right to control details of service delivery is reserved by the employer (Agostino & Krieger, 2015).
Finally, maintaining a rigid company dress policy does not promote fairness, equity and balance in an organization that taps employees from diverse cultural, racial and religious backgrounds. This behavior is unethical since ethical principles and standards require that all employees be treated equally and with dignity and fairness (Ghumman et al., 2013). The rigidity of the organization’s dress policy should not go over and above humanity standards that guarantee special and protected privileges such as those seen in the case scenario thus, the employee should be allowed to wear her hijab. This is because according to her religion, this is a significant trait that helps in highlighting and maintaining her identity.
In conclusion, workplace practices must be guided by ethics to ensure fairness and equity is served to all at all levels. While organizations want to serve their business interest, best practices as outlined by law and ethical standards must always take precedence. Employee rights against employment discrimination are protected by the Equal Employment Opportunity Commission (EEOC) at the federal level and fair employment practices agencies (FEPAs) at the state level. The employee with a complaint of discrimination can as well file a private lawsuit according to the provisions of Title VII.
References
Agostino, F., & Krieger, T. (2015). Federal employment misclassification. Journal Of Tax Practice & Procedure , 17 (3), 31-46.
Gardner, R. G., Daff, L. I., & Welch, J. J. (2013). Independent contractor or employee? Journal Of Financial Planning , 26 (2), 31-33.
Ghumman, S., Ryan, A. M., Barclay, L. A., & Markel, K. S. (2013). Religious discrimination in the workplace: A review and examination of current and future trends. Journal of Business and Psychology , 28 (4), 439-454. doi:10.1007/s10869-013-9290-0
Stafford, B. E. (2016). Riding the line between "employee" and "independent contractor" in the modern sharing economy. Wake Forest Law Review , 51 (5), 1223-1254.
