Is Minimum Wage Required for My Startup’s “Gig” Workers?

Is Minimum Wage Required for My Startup’s “Gig” Workers?

Employment Agreements, Independent Contractor, Start-Up
Startup companies (particularly those in technology or e-commerce) typically rely on independent contractors to fill key roles in the early stages of development, design, and implementation. But not a few startups we advise also rely on short term, part-time, “gig” workers to make their business model go. These workers are typically paid by the end-customer through the startup's platform, which facilitates the transaction (usually for a cut). So, are such companies required to pay or guarantee a certain minimum wage to such workers? Minimum Wage and Arizona Law NOTE: I am only licensed to practice here in Arizona and, as such, this post deals strictly with the law of Arizona. You should research the law of your own state or consult a qualified lawyer in the state where you are…
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Can Our Independent Contractor Claim Unemployment under the CARES Act?

Independent Contractor, Unemployment Insurance
In the wake of the COVID-19 crisis affecting the country and specifically Arizona, our Phoenix law firm has been getting questions from business clients who have received notices of unemployment claims filed by their independent contractors whom they had to let go due to the impact of the Coronavirus. This article examines whether your former independent contractor can even apply for unemployment benefits and what you as their most recent "employer" should do if you receive a notice of their unemployment claim here in Arizona.  Can Independent Contractor's Apply for Unemployment in Arizona? It is not unusual for tech startups to use independent contractors to address companies' short-term needs for certain skills, without taking on the financial and tax obligations of a regular, "W-2" employee. Under normal circumstances (at least…
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Is Your Customized Software a ‘Work for Hire’?

Is Your Customized Software a ‘Work for Hire’?

Contracts, Copyright, Employment Agreements, Independent Contractor
Your company just hired someone to help develop your new mobile app. Your agreement with this programmer or engineer does say that anything she creates for you is a "work made for hire". So your business is good, right? No way that the new hire can ever claim ownership to any of the deliverables, correct? In my Phoenix technology law practice, I hear this a lot as it pertains to software and app development.   Unfortunately, the term "work made for hire" or, more colloquially, "work for hire", is a term as misunderstood by companies as it is misused. "Work Made for Hire" Doctrine Explained Generally, a work that is subject to copyright is automatically the property of the person who created it (assuming that author has not transferred some or…
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Got DIBS? How AZ’s Independent Contractor Law affects Your Startup

Got DIBS? How AZ’s Independent Contractor Law affects Your Startup

Business Formation, Employment Agreements, Independent Contractor
In this post, we examine Arizona's "DIBS" independent contractor law and whether it matters what startup companies call their employees. To be more specific, whether an emerging business can (or should) characterize its workers as regular employees or "1099" independent contractors? The Contractor/Employee Classification Dilemma The choice of whether a new business should call their new employee a "contractor" or an "employee" can be a difficult one, but it's a choice that comes with very real consequences for the wrong choice.  Generally speaking, you as the employer ordinarily have the burden of proving that an actual independent contractor relationship exists by "clear and convincing" evidence.   The need for clarity on this issue is perhaps more important than ever.  State and Federal misclassification enforcement efforts have been on the rise.  To…
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