@MPIGNY - Fall 2015 - (Page 14)

#feature AVOIDING EMPLOYM Top Tips for Vendor Relations and Contracting BY MICHAEL JAKOWSKY T o organize and run successful events, meeting planners must manage complex relationships among clients and vendors. Vendor relationships, however, may expose planners to liability under federal and state employment laws. To limit such liability, planners should consider the following when working with vendors. court ruled that the dancers were employees, not independent contractors and entered judgment in favor of the dancers on their wage claims. The club eventually settled the case for approximately $15 million. This case illustrates the need for businesses engaging independent contractors to carefully enter into and manage those relationships. Avoid Creating Employment Relationships with Vendors Require Vendor Compliance with Employment Laws Planners should avoid inadvertently creating employment relationships with their vendors. Determining whether an individual is an independent contractor or an employee is highly fact-specific; the determination typically focuses on the amount of control or supervision exercised over the individual. Worker misclassification can expose businesses not only to liability for unpaid wages, overtime, taxes and benefits, but also to workers' compensation and unemployment insurance claims. Example: Are Exotic Dancers Employees or Independent Contractors? A $15 Million Question In Hart v. Rick's Cabaret International, Inc., a nightclub hired exotic dancers to perform and classified them as independent contractors. The dancers received their "performance fees" directly from the club patrons. The dancers filed a class action against the club for, among other things, unpaid minimum wages under federal and New York law. The dancers asked the federal district court to enter judgment in its favor and argued that they were not independent contractors; rather, they were employees because the club exercised significant control over them, as detailed in the club's dancer guidelines. The guidelines detailed various work rules for the dancers such as, hours of work, minimum number of work days, shifts, entrance/exit use, costumes (including the number and types of dresses and shoes), grooming, restroom use, tipouts, fees and rules regarding dance performances. The failure to comply with the guidelines would result in fines, warnings or termination. The district court agreed that the club exercised significant control over the dancers based on the guidelines and imposition of fines for guideline violations. Thus, the district 14 @MPIGNY FALL 2015 Planners should require that vendors establish that they run legitimate businesses and comply with applicable law. Vendors should provide tax identification numbers, invoices and proof of insurance, including workers' compensation, unemployment and comprehensive general liability insurance coverage. Planners should include representations in their vendor agreements that the vendors comply with all applicable employment laws; that neither the vendor nor its employees will consider the planner as an employer; that they are not entitled to any employment benefits from the planner; that the vendor is responsible for all taxes and withholdings; and that the vendor will indemnify the planner and not seek any payments from the planner. Vendor agreements also should include equipment indemnities stating that the vendor is solely responsible for any loss or damage to its equipment and will hold the planner harmless for such damage. Avoid the Courthouse - Consider Arbitration Agreements To help limit litigation expenses and expedite dispute resolution, planners should consider including arbitration provisions in their vendor agreements. Such provisions should cover all disputes arising between the parties and limit the right of vendors to participate in class actions.

Table of Contents for the Digital Edition of @MPIGNY - Fall 2015

WHY I VOLUNTEER
AVOIDING EMPLOYMENT LAW LIABILITY
5 QUICK AND EASY TIPS TO PREVENT BURNOUT
MPI WEC 2015: SPOTLIGHT ON SAN FRANCISCO
MEET FIONA PELHAM
MPI INTRODUCES THE MPI ACADEMY AND EXPERIENTIAL EVENT SERIES
2015 MPIGNY HARD ROCK CAFE GOLF OUTING
SUSTAINABLE MEETINGS IN COPENHAGEN

@MPIGNY - Fall 2015

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