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Law firms have traditionally been large consumers of contract labor for a variety of purposes. Such positions often include of-counsel attorneys, discovery attorneys, investigators, and temporary workers of all sorts that are engaged to work on a specific matter. These workers are traditionally classified as independent contractors, issued a 1099 and treated as ineligible for employee benefits.
In recent years, many states have started to adopt the "ABC" test to determine whether a worker should be classified as an independent contractor or an employee. Under the ABC test, there is a general presumption that all workers are employees and that only workers who are performing tasks outside the general course of the employer's business should be considered independent contractors. Under the ABC Test, a contract attorney hired to work on litigation by a law firm must be classified as an employee, but a plumber who is called in to fix the restroom remains an independent contractor.
In conjunction with the adoption of the ABC Test, states impose severe penalties for misclassifying employees as independent contractors.
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