As political controversy and litigation swirl around the definition of an employee versus an independent contractor, the 9th Circuit ratcheted up the debate by applying a federal anti-discrimination law in a way that covers both employees and independent contractors.
A key motivation for hiring independent contractors is that they save an employer money in employment taxes, benefits, insurance premiums and claims under the Americans With Disabilities Act (ADA), which specifically covers only employees. At issue in the 9th Circuit case was whether the Rehabilitation Act of 1973, which bans discrimination based on disabilities by government entities in “any program or activity receiving federal financial assistance,” also covers only employees, not independent contractors. In November 2009 the 9th Circuit, following the lead of the 10th Circuit, said no. But the 6th and 8th Circuits have previously ruled the opposite way.
