Assignment Objective: As a manager, you will oversee the hiring process for many
different types of positions. Misclassifying the relationship can open your organization
up to significant liability. This assignment gives you experience in weighing the various
factors that determine which classification is appropriate so that you can bring that
knowledge into the workplace.
Content:
Eliminate Food Deserts is entering its event season and has a new fundraising running event on
the calendar. You have decided to hire a contract worker to organize the event instead of hiring
an employee. You already have an employee that oversees the logistics of Eliminate Food
Deserts’ other fundraising events. However, she already has enough work on her plate that
adding another event to her workload is not feasible.
The contractor is going to be paid a fixed fee of $10,000 and will work from May 1 through July
31. The event is a 5k run and is held on July 27. The contractor is responsible for all logistics of
the event including obtaining sponsors for the event, negotiating contracts with vendors,
recruiting and overseeing volunteers, obtaining required permits, and managing all employees,
vendors, and volunteers day of event, which is a Saturday. The contractor already has
experience in this field and does not require training aside from becoming familiar with the nonprofit’s mission. Since the contractor is giving you a reduced rate, he is going to use a computer
and work space provided by Eliminate Food Deserts to complete his duties. He will use his cell
phone for calls. To make this easier on everyone, he will have 15 hours a week where he is
scheduled to come in. If he needs additional hours, he can come in any other time and will also
come in as requested by you. The contractor let you know that he is very interested in your
mission and is therefore only going to take your non-profit on as a client during this time so that
he can dedicate all his time to this event. The non-profit has provided the contractor a schedule
of when certain tasks need to be completed and will let him determine how to get the tasks done
by that time.
During the term of the contract, the contractor signs several contracts with vendors on behalf of
Eliminate Food Deserts. One of the contracts ends up being at a price much higher than what
you usually pay for the services so you decide to enter into a different contract with a different
vendor. The first vendor demands payment and provides the contract signed by the contractor to
show that Eliminate Food Deserts owes the money.
Questions:
Question 1: Is the contractor really an independent contractor or is he an employee? Why? Be
sure to outline all facts that support each classification.
Question 2: Assume the contractor is an employee. What potential issues could Eliminate Food
Deserts run into based on only the facts above?
Question 3: Assume the contractor is an independent contractor. How could you have protected
Eliminate Food Deserts in the independent contractor agreement from paying the vendor?
