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Legal Liabilities For Employers: How To Handle Harassment Claims Involving Independent Contractors

Businesspeople arguing around a table about independent contractors and their harassment claims.

Harassment can be a prevalent issue in many workplaces and can lead not only to low morale and employee dissatisfaction but also to financial and legal repercussions if unaddressed. For employers, knowing how to react appropriately to harassment claims and prevent harassment in the workplace are key skills to help foster a positive work environment. Additionally, the classification of employees may change the nature of a harassment claim, such as with true employees and independent contractors.

Independent contractors generally function differently from employees with W-2 tax withholdings, and as such it can be difficult to understand the legal rights in play. Labor laws can be strict in New York, so employers may benefit from properly classifying employees and understanding the legal implications of those classes.

A skilled New York business litigation and employer defense attorney from Schwab & Gasparini may be able to provide insight into harassment claims against employers. Consider scheduling a consultation by calling the relevant office at (315) 422-1333 in Syracuse, (518) 591-4664 in Albany, (914) 304-4353 in White Plains, or (914) 304-4353 in Hudson Valley for details.

How Do Harassment Laws Apply to Independent Contractors?

In the past, discrimination and harassment laws have not applied to independent contractors, as they are not considered a part of the company’s legal entity. The more well-known anti-discrimination acts such as Title VII of the 1964 Civil Rights Act, the Americans with Disabilities Act (ADA), and the Age Discrimination in Employment Act (ADEA) may not apply to independent contractors or freelancers. However, depending on the state in question, independent contractors may still be protected by the state legislature.

Difference Between W-2 and 1099 Employees

This disparity is generally due to the difference between W-2 employees and 1099 employees. With W-2 employees, the employer generally has much greater control over the work being done. They may have a say in oversight of the job and determining how it is done. However, W-2 employees may require more of their employer, including tax deductions and other obligations and protections.

1099 employees are referred to as independent contractors, freelancers, self-employed individuals, and many other titles. These employees generally do not answer to the employer for the methods used to achieve the result, although they are answerable for providing a product or service by the standards agreed upon in their contract.

Federal Harassment Protections for Independent Contractors

Due to this difference in contractual relationship, the federal government provides protection only for W-2 employees, not independent contractors. This means that harassment claims from part-time and full-time employees with a W-2 status may be valid under federal acts like the 1964 Civil Rights Act, the ADA, and the ADEA. However, the federal government does not offer those same protections for 1099 employees or independent contractors.

However, this does not mean that harassment claims from independent contractors are hopeless. What it means is that states have created their own legislature to prevent harassment of independent contractors, which could alter harassment claims cases based on the state in question. New York, having notably strict wage and hour laws, also has extended significant protections for independent contractors.

For more information on New York’s discrimination laws, consider speaking with a skilled employer defense lawyer from Schwab & Gasparini.

New York City’s Anti-Discrimination Laws

Despite the lack of federal legislation protecting independent contractors from harassment, New York City provides equal protection for 1099 employees as it does for W-2 employees. According to the New York City Commission on Human Rights, all independent contractors or freelancers in New York City are protected from harassment based on a myriad of factors, including age, race, gender, and more. Not only does this mean that employers may be liable for harassment claims against their company from independent contractors, but they also may be held liable for the actions of independent contractors if those actions are found to be discriminatory. This additional level of accountability may affect a harassment case in New York.

2020 Expanded Protections

The New York State Division of Human Rights has also been steadily expanding the reach of laws protecting independent contractors from 2019 to 2020, with changes to the reach and scope of the existing anti-discrimination laws. These changes may lead to more favorable circumstances for employees filing harassment claims against an employer.

Navigating Harassment Claims as an Employer

For employers, understanding how to navigate harassment claims effectively could help save time, money, and a business’s reputation. Generally, much of the work to avoid harassment claims is done beforehand, by creating preventative systems and providing adequate training for employees. However, understanding the nature of harassment and the nuances of the New York state laws on anti-discrimination may help clarify a path forward.

Defining Harassment

The U.S. Equal Employment Opportunity Commission defines harassment as unwelcome conduct based on race, age, ethnicity, religion, sex, or many other factors. This can include discrimination in hiring practices as well as harassment in the workplace. Understanding the nature of these offenses may help clarify when harassment claims are warranted from independent contractors.

Steps to Prevent Harassment in the Workplace

One of the primary steps an employer can take to help prevent harassment in the workplace is clarity and proper training of both employees and independent contractors. An established employee handbook and anti-discrimination training could help reduce the risk of harassment by providing guidelines and standards for the entire company. This helps create a community and culture that reduces the risk of harassment claims.

Additionally, clear and accurate record-keeping is another practice that may help protect employers experiencing harassment claims. Easy access to information and a catalog of relevant details could help show the true nature of harassment claims. Establishing clear hiring and termination practices may also factor into disputes with independent contractors. In these situations, documentation is often the key to showing the intent of an action or the ideals of a company.

A New York Employer Defense Attorney Can Help

Harassment claims could severely damage the reputation of a business and the presence of harassment in the workplace, even among independent contractors, can damage morale and employee satisfaction. Employers may be responsible for addressing these issues for their 1099 independent contractors as per New York law. Consider speaking with an experienced New York employer defense lawyer from Schwab & Gasparini by calling (315) 422-1333 in Syracuse, (518) 591-4664 in Albany, (914) 304-4353 in White Plains, or (914) 304-4353 in Hudson Valley for details.

Mon Apr 21 2025, 12:00am