Since business aviation operators are increasingly turning to independent contractors to contain costs and do more while conserving resources, NBAA has published a guide aimed at helping flight operators properly classify these workers as either employees or independent contractors. “If a worker is classified incorrectly, there are significant tax, liability and legal risks for the employer,” NBAA said.
“The U.S. Department of Labor has one standard it applies. The IRS has another. Then we have 50 states with, quite frankly, 50 different interpretations about what it means to be an employee versus an independent contractor,” said employment law expert Greg Ripple at the firm of Miller Johnson. Ripple also serves as chair of NBAA’s employment issues working group.
NBAA’s Best Practices for Utilizing Independent Contractors outlines issues related to properly classifying independent contractors, providing employers with an overview of the various state and federal government tests they can use to determine the status of a worker. It also addresses the tax and employment law considerations when using independent contractors, as well as how the status of a worker might affect aircraft insurance.