Question

Terri has an annual contract with Jackson Mortgage Brokers to provide property maintenance services; this includes lawn care, snow removal and parking lot maintenance. Terri spends, on average, 20 hours per week working at the company’s premises and is paid a flat amount monthly. She hires part-time workers, when necessary, to assist her. Terri does not have any other clients. Terri uses her own small tools; however the company supplies and maintains a riding lawn mower and a snow plow for her use. Her contact at the company is Glenn Simpson, the Facilities Manager, who meets with her every Monday to discuss the work to be done that week. Glenn approves Terri’s monthly invoices and submits them to Accounts Payable. Does Terri have a contract of service or a contract for service with Jackson Mortgage Brokers? As the company’s Payroll Supervisor, explain to Glenn the process and factors you used to make your decision. [300-500 Words]

Answer 1

Terri have a contract for service with Jackson Mortgage Brokers.

Analysis:

"Contract of service" can be clearly understood as the relation between an employee and the employer. The employer lays all the rules for the employee to strictly follow. The employee can't hire other people to do their job with the employer, he has no right. They work for a minimum of 8 hours per say a day. They are bound with the scope given to them.

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"Contract for service" is a contract which is entered between a principal and principal. It is generally understood with contracts entered by contractor with a client company. Contractor is bound to do the duty assigned and the means of doing is not to be bothered by the client. Client don't lay any rules like the case of employees.

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In this case, Terri has entered into annual contract with Jackson Mortgage Brokers to provide property maintenance. Terri spends only 20 hours a week and is paid a flat amount monthly.

Terri has the right to hire part-time workers to assist her in her work.

Terri has been working the lesser number of hours than a general employee works and Terri has right to share her work without any permission from the client (Jackson Mortgage Brokers).

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Hope this is helpful!!