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The main pieces of employment legislation, chief among which are the Labour Relations Act 66 of 1995 (LRA) the Basic Conditions of Employment Act 75 of 1997 (BCEA) and the Employment Equity Act 55 of 1998 (EEA), apply to employees and not independent contractors.
The test is called the ABC Test, and it's included in federal legislation called the Protecting the Right to Organize Act (commonly known as the PRO Act) that's currently being considered by Congress. If freelancers or independent contractors pass the test, they can continue working independently.
Summarily, the ABC test is stricter than the Borello test and renders more workers independent contractors. The ABC test is not unique to California and is commonly used all over the country, including in Illinois, which codifies the ABC test for the purposes of unemployment benefits.
The new law also expressly codifies an extended application of the blue pencil doctrine, allowing an Illinois court to rewrite unenforceable provisions of non-compete agreements to make them reasonable and enforceable.
Independent contractors are self-employed workers who provide services for an organisation under a contract for services. Independent contractors are not employees and are typically highly skilled, providing their clients with specialist skills or additional capacity on an as needed basis.
Pay basis: If you pay a worker on an hourly, weekly, or monthly basis, the IRS will consider it a sign the worker is your employee. An independent is generally paid by the job, project, assignment, etc., or receives a commission or similar fee.
Follow us on LinkedIn to see future News. The Act is not retroactive, but, beginning on January 1, 2022, the Act: bans noncompete agreements for employees making $75,000 per year or less (the salary threshold will increase by $5,000 every five years until reaching $90,000); and.
As an independent contractor, you may have more freedom to choose how you complete your work, but you are responsible for paying your own taxes, getting your own health insurance, and paying into unemployment and workers comp funds if you wish to access those benefits.
Adequate Consideration for the Restrictive Covenant Agreement. Of particular note for employees is that in Illinois in order for a non-compete restrictive covenant agreement to be enforceable, among other things, there must be adequate consideration.
Notably, the new law does not apply to agreements covering an employer's confidential and proprietary information, protection of trade secrets, or inventions assignment agreements. The law also does not address covenants for independent contractors.