A recent call from a NARDA member contains a warning to all retailers. Several years ago the member “farmed out” his appliance installations and product deliveries. The member had been a target of unionization. Faced with a difficult economy, competitors that did not have unionized employees and low-priced Internet sales, the retailer simply could not afford to employ union employees. To solve the problem, he asked his employees to become independent contractors.

Making employees independent contractors meant the member did not have to be concerned with discrimination claims under Title VII, the Family Leave and Medical Act, and many other worker protection laws and regulations. The retailer no longer had to contribute to workers’ compensation and unemployment funds. Overtime and minimum wage requirements do not apply to independent contractors. Finally, the member no longer had to withhold state and federal income taxes or social security or Medicare taxes. The member received the same services at a considerably reduced cost.