The classification of a worker in Kentucky is not just a label. Your classification as a worker or a contractor is a definition that carries significant legal and financial implications.
Kentucky Supreme Court
The Kentucky Supreme Court has outlined a six-factor test to clarify the distinction between a worker and a contractor. This test focuses on aspects such as the permanency of the working relationship, the level of skill required to do the job, the investment in equipment required, the potential for profit or loss in the position, the degree of control exercised by the reported contractor/employee and the relevance of the reported contractor’s/employee’s service to the business’s core operations.
Impact of being an employee
Being classified as an employee in Kentucky entitles you to a range of benefits, including employer-provided or supplemented health insurance, paid leave (sick/vacation leave) and unemployment compensation. These are protections and advantages that are generally not afforded to independent contractors.
Why it matters
The correct classification is crucial. For workers, it determines eligibility for benefits and protections under labor laws. For employers, accurate classification is essential to avoid legal disputes and potential financial penalties. For both, it can also avoid issues with the IRS later.
Staying updated and informed
Knowledge is power. The Kentucky Education and Labor Cabinet provides resources to help both workers and employers understand the intricacies of employment classification. Workers should be well-informed about their rights, and employers must adhere to state laws to ensure a just workplace. For comprehensive information on employment classification and benefits in Kentucky, do your research to understand your rights and responsibilities.