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Many businesses in the greater Atlanta area and throughout Georgia rely on independent contractors to perform a variety of tasks. While valuable, contractors can also pose liability risks.
Whether liability extends to the employer depends on factors such as the degree of control the business exerts over the contractor, the type of work performed and the customer’s perception.
Independent Contractors vs. Employees
Georgia and federal law distinguish between employees and independent contractors based on the degree of control a business exerts over their work. Independent contractors are generally responsible for their actions, but certain employment practices may expose a business to greater risk.
The extent of this relationship and how it may be interpreted by the court could be dependent on the answers to these questions:
- Does the contractor have control over their own work schedule and methods?
- Does the business provide tools, equipment or a workplace?
- Is the contractor paid on a per-project basis or hourly?
- Are the contractor’s services integral to the business?
The more a contractor resembles or is treated like an employee, the greater the business’s liability exposure.
When an Atlanta Business Might Be Liable
Negligent Hiring or Retention
A business that hires a contractor without verifying their qualifications or background could be liable if the contractor’s negligence causes harm. For example, a negligent hiring claim can arise from hiring a contractor with a history of safety violations if their work on your premises causes an injury.
Non-Delegable Duties
Some commercial duties are considered 'non-delegable' and cannot be assigned to a contractor to avoid liability. For example, maintaining a safe premises for customers is typically considered non-delegable. If that job is left to an independent contractor, the employer would likely remain liable if the contractor’s performance caused safety hazards or injuries on the premises.
Direct Supervision
If your business exercises substantial control over how contractors perform their work, the courts might treat them like an employee for liability purposes.
What does and doesn’t constitute direct supervision could vary depending on the job. For example, the level of detail provided with instructions on how certain tasks must be completed, or the length of time a contractor works exclusively for your business might influence the court’s determination.
Apparent Authority
If the contractor is portrayed as an employee of the company when performing their job duties, and customers reasonably believe the independent contractor is an actual employee of the business, the business could be held liable for their actions.
For example, if a contracted delivery driver is driving in a panel van with the company’s logo and they are wearing the company’s uniform, the company would likely share liability if the contractor causes an injury.
Mitigating Liability Risks When Using Contractors
- Conduct thorough background checks and verify the contractor’s licenses and certifications. This is especially important in hazardous
fields like construction.
- Draft clear contracts that define the scope of the contractor’s responsibilities. This should ideally include clauses that specify the contractor is responsible for their own liability insurance.
- Avoid providing excessive oversight and define general project expectations rather than controlling how the contractor completes their tasks. Excessive oversight increases the likelihood that courts may treat the contractor as an employee in liability issues.
- Require contractors to provide proof of adequate liability insurance.
- Make it clear to customers and clients that the individuals they are interacting with are independent contracts and not employees to prevent misrepresentation.
Dealing With Claims Arising From the Actions of Independent Contractors
Independent contractors are core to the operations of many Atlanta businesses. There are ways for companies to legally reduce their liability exposure, such as thoroughly vetting contractors, defining relationships, and minimizing direct control over their work. If you’re facing a claim or need advice on contractor-related liability, call the Law Office of Cameron Hawkins at (678) 921-4225 for a free case evaluation.
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