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by By Jonathan T. Howe, Esq. | July 01, 2010

The relationship of an employee to her employer, or, for that matter, a contracted individual to his client, can become tenuous and litigious. It helps to know your rights and responsibilities.

Those in the meetings industry tend to be either contracted labor, aka independent contractors, or employees. While I deal here only with federal law, most states have imposed additional requirements. Most states also employ people "at will," which means either party is free to terminate the employment relationship at any time, without cause.

Covered by Law One of the key elements in all employment situations is whether an individual is considered an exempt or non­exempt employee.

An exempt employee generally receives a set salary and performs executive, administrative and professional services, outside sales and certain skilled computer functions. These individuals carry out discretionary responsibilities and have management authority. Titles mean nothing; it is what the person actually does that counts.

Also speaking generally, if a job only requires ministerial activities and the person is paid hourly, it is non­exempt, and such employees are entitled to receive minimum wage and overtime compensation, whether they are working full- or part-time. They also are eligible for other rights and protection under the Fair Labor Standards Act, which defines hours worked and other benefits. Under the act, nonexempt employees get 1.5 times regular pay for all time worked in excess of 40 hours per week. Working 60 hours one week and only 20 hours the next still entitles the nonexempt employee to 20 hours of overtime compensation for the first week.

Privacy Rights With the ever-present ability to use internal e-mail, employers and employees still are juggling the right of the employer to scrutinize the e-mails of employees. The key element here is company policy. Traditionally, the use of a company computer and the internal e-mail system grants the employer the right to review and act on e-mails that are transmitted through its system.

An interesting deviation comes from a recent case that dealt with communications between an employee and her attorney that were sent from her work computer but used a Yahoo e-mail address. The New Jersey Supreme Court, after considering all the issues, concluded that the employee's e-mails were protected by the attorney/client privilege, in spite of company policies that might well have waved the attorney/client privilege. The court said the employee had taken steps to protect her privacy, and those steps shielded her from a waiver of the attorney/client privilege.

Tax Implications IRS troubles can be somewhat severe if you misidentify an independent contractor vs. an exempt employee vs. a nonexempt employee. For example, for a miscalculation of an individual as a contractor, the employer could be obligated to pay the employee's back taxes, not to mention a host of penalties.

The more the company controls the activities of the person, the more likely the individual will be deemed an employee. In all cases, the absence of a written agreement with an alleged contractor will make that person an employee for tax purposes.

Offering a clearly written policy manual, and having a written understanding between the parties that following those policies does not create a contract, can do much to alleviate some situations. Still, having a written and agreed-upon definition of the terms of employment covers all bases.