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Maryland wage and employment laws do not apply to "Independent Contractors".
The question of who is an employee and who is an independent contractor is important
and often complex. Moreover, the financial consequences in making
this determination are significant for both workers and employers.
For workers, these consequences include entitlements to minimum
wage and overtime pay, unemployment benefits, workers' compensation
benefits, Social Security employer contributions, federal and
state tax withholdings, protections against illegal employment
discrimination, etc. At stake for employers are the financial
and legal obligations in complying with these federal and state requirements.
A signed agreement declaring that a worker is an independent contractor is not, by
itself, enough to establish the fact. The "economic reality"
of the work relationship determines the worker's status. Thus,
if two individuals in fact stand in the relation of employer
and employee to each other, it is irrelevant that the worker has
agreed to be called an independent contractor. The measurement,
method, or designation of compensation is also of lesser importance,
if the relationship of employer and employee in fact exists.
Many government agencies have their own criteria for making the employee versus independent
contractor distinction. These criteria often are established under separate laws.
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