We have an employee that has worked for us for a year that has moved out of our company boundary for a company vehicle.

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Customer: Hi, We have an employee that has worked for us for a year that has moved out of our company boundary for a company vehicle. We have suggested that the additional cost of travel btwn the boundary and home be deducted from his hourly rate or he can collect the vehicle each day from our premises. He has come back to us offering to contract to us at a rate that doesn't seem high enough to cover his costs. I'm concerned that we may have a problem with the contractor/employee relationship as his duties and expectations would be the same as they are currently.
JA: Have you discussed this with a manager or HR? Or with a lawyer?
Customer: I am the HR person in the company and we are looking for employment lawyer advice
JA: Are you an "at will" employee? Do you belong to a union?
Customer: Not a union
JA: Anything else you want the Lawyer to know before I connect you?
Customer: I don't think so, thank you
Answered by null in 5 mins 2 years ago
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null, Expert

Greetings and welcome. I am reviewing your question and will respond back right away! ***** Quick note re phone calls and follow ups: 1. If you get a phone call offer from the site that typically has an additional charge and requires your card company to clear it - You are welcome to accept the call; or reject it it and just stay with me in chat mode. If you select the call, another expert would call you as soon as available - 2. After you get my answer, if you have a follow up, please ask me - I will be usually be able to reply back right away. *****

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null, Expert

What outcome do you envision at this point?

Customer
Thank you, ***** ***** a New Zealand employment lawyer?
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null, Expert

I am not so let me open for a local expert since you posted on the US side.

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null, Expert

Hi

I am a New Zealand lawyer based in Wellington and will help you with your question today. Please wait while I read the question so I can make the most useful response

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null, Expert

There is quite a difference between being a contractor and being an employee. As you are aware, he would then need to pay his own tax and GST rather than being on PAYE. He would need to factor in to his hourly rate all his other expenses. In some ways it can be easier for an employer if he is on a contract because it does reduce your administration costs. You can also cancel a contract of a contract much more easily than an employee. So those are factors which are helpful. In the end, as his employer, you will be looking at the cost of his employment and the benefit and how this will be best managed

Customer
Thank you Chris. Are we at risk at a later date of being judged that this relationship is really an employee/employer, as his duties are essentially the same? His wife works in employment law, the rate he is offering concerns me.
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null, Expert

That is a proper concern because where a contracting agreement is effectively the same as an employment agreement it will be ruled to actually be employment.
Customer
do I understand you correctly, you would advise it would be unwise for the company to solve the extra vehicle cost in this manner?
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null, Expert

I would be very careful because it may look too much like an employment contract
Customer
Thank you. Appreciate your advice
Customer
If I pay a bonus does it all go to you?
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null, Expert

thanks
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