Operations

Pennsylvania Court Says Contractors Not Entitled to Unemployment

LCT Staff
Posted on March 2, 2006

HARRISBURG, PA. — Limousine companies that rely on independent contractors (ICs) to chauffeur their clients are not the drivers’ employers and do not have to pay unemployment taxes for them, Pennsylvania’s Supreme Court ruled. The state Labor Department, which had assessed five limousine companies more than $75,000 in unemployment compensation taxes, penalties and interest, had originally decided that the drivers do not own the vehicles and lack the proprietary interest in their businesses necessary to qualify as ICs.

The court said the drivers are entitled to IC status because they are free to work for competing limousine companies with no adverse impact; their ability to work does not depend on the existence of any one company; and, they possess the driver’s licenses and necessary experience.

SOURCE: Associated Press & CBS 3 - Philadelphia

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