“Relative Nature”: Can You Bear This Broad Workers Comp Test for Employee Status?

Nature can be cruel. Friends can be crueler.

A 32-year old man was attacked by a brown bear earlier this month while hunting near Cooper Landing, Alaska. The man survived the bear attack, but then his hunting buddy shot him in the leg when trying to kill the bear. Thanks, buddy!

(No, it was not Dick Cheney.)

Nature makes its way into independent contractor status tests too, sometimes — relative nature, that is. Today’s post is about a test sometimes used in workers compensation cases.

In D.C., the test for whether someone is an employee under the workers’ comp law is a “relative nature of the work test.” States that have adopted this broad test have moved away from the more common “right to control” test.

Under this test, an employment relationship is found when (1) the work being done is an integral part of the regular business of the employer and (2) the worker, relative to the employer, does not furnish an independent business or professional service.

Here’s how D.C. courts interpret the two parts.

The first part focuses on the “nature and character of the claimant’s work or business” and requires consideration of three factors: (a) the degree of skill involved in the work in question; (b) the degree to which it is a separate calling or business; and (c) the extent to which it can be expected to carry its own accident burden.

The second part of the test focuses on the relation of the claimant’s work to the employer’s business and also requires consideration of three factors: (a) the extent to which the claimant’s work is a regular part of the employer’s regular work; (b) whether it is continuous or intermittent; and (c) whether its duration is sufficient to amount to the hiring of continuing services, as distinguished from contracting for the completion of a particular job.

In states that use this type of workers comp test, more relationships will be captured than under other, more traditional worker classification tests.

But this might not be a bad thing. The benefit of workers comp coverage for businesses is that it protects them from tort liability. In industries like construction, where injuries can be serious, coverage can be helpful. The disadvantage is that workers comp is no-fault, and you’re required to pay for the coverage.

So next time you’re hunting to see whether you might need to provide workers comp coverage to your contractor or causal laborer, remember that some states have pretty broad tests. Not broad enough to get coverage if your hunting buddy shoots you in the leg, but you get the idea.

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© 2024 Todd Lebowitz, posted on WhoIsMyEmployee.com, Exploring Issues of Independent Contractor Misclassification and Joint Employment. All rights reserved.

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A New Gambit? DOL Independent Contractor Rule Still Facing Court Challenges

There are lots of strategies for winning a chess match. Most gambits are named for people, but some have funny names like the Alien Gambit, the Zilbermints Double Countergambit, and the Fried Liver Attack.

At a chess tournament earlier this month in Makhachkala, Russia, one competitor tried a new strategy. She (allegedly) smeared mercury on the board and chess pieces of her opponent before the match. There’s video. This seems a bit outside the rules. After her opponent began experiencing respiratory distress and tasted iron in her mouth, the Mercury Gambit proved not to be a long-term winning play.

The saboteur now faces criminal prosecution and a lifetime chess ban. So don’t try this at home.

The DOL is facing an array of gambits too. But these gambits are lawsuits, each trying to get a court to revoke the DOL’s recently adopted independent contractor rule. The rule went into effect March 11, 2024, and we wrote about it here.

I’m aware of four pending challenges to the rule, all in federal court:

  • In a Texas case brought by a coalition of business groups, the plaintiffs filed a brief July 1st arguing that under the Supreme Court’s Loper Bright decision, the DOL lacked authority to issue the rule. Coalition for Workforce Innovation v Su, E.D. Texas.
  • In a Georgia case filed by freelance writers and editors, the parties have filed cross-motions for summary judgment, all of which are still pending. Warren v Su, N.D. Ga.
  • In a Louisiana case, a family-owned trucking company sought a temporary restraining order to prevent the rule from taking effect. The motion was denied, and the plaintiffs intend to appeal. The court has stayed the case pending the appeal. Frisard’s Transportation v DOL, E.D. La.
  • In a Tennessee case, two writers filed suit to try to enjoin the rule, and the parties have filed cross-motions for summary judgment. Pittman v. DOL, M.D., Tenn.

When compared to mercury poisoning, court challenges really seem to be the way to go. I commend the strategy. Perhaps not as original, but tried and true.

The DOL’s 2024 independent contractor rule remains in effect for now, and businesses should structure their independent contractor arrangements to comply.

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© 2024 Todd Lebowitz, posted on WhoIsMyEmployee.com, Exploring Issues of Independent Contractor Misclassification and Joint Employment. All rights reserved.

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Smashing! House Committee Presses DOL to Reveal Any Changes to Its Independent Contractor Enforcement Strategy

In this video, Muhammad Rashid of Pakistan, crushes 39 cans in 30 seconds. With his head. (I like the little fist pump he gives at the end.)

Why would a person do this? To get attention, I imagine. It caught my attention.

The House Committee of Education and the Workforce may also be trying to solicit a bit of attention, but I do want to know the answers to the Committee’s questions.

On August 8, they sent this letter to Acting Secretary of Labor Julie Su, asking her for information about the DOL’s enforcement activity under its new independent contractor rule. The Committee would like the DOL to answer three questions:

1) Since January 20, 2021, how many instances of misclassification have Wage and Hour Division (WHD) inspectors found? Please provide the total number of instances across each occupation that has been subject to investigation.

2) Please provide the number of misclassification enforcement investigations WHD has initiated for each specific industry sector since January 20, 2021.

3) Has DOL initiated any investigations related to misclassification based on its coordination with the National Labor Relations Board and the Federal Trade Commission? If so, please provide the number of investigations DOL has undertaken, broken down by each specific industry segment.

Committee Chair Virginia Foxx (R-not from Virginia) writes that she asked Su these questions when Su appeared before the Committee on May 1, but Su failed to answer. The letter begins by knocking Su around a bit, alleging that the DOL with its new independent contractor rule is trying to destroy all independent contractor relationships.

Maybe yes, maybe no. I don’t know where this letter falls on the continuum of publicity stunt vs. actual relevance for policy making, but I think these are good questions. It would be hopeful for businesses to know whether the DOL’s enforcement strategy has shifted since enactment of the new rule. And if so, how.

The Committee might get the answers it seeks, or it might just be banging its head against the wall cans. But it never hurts to ask.

What Mr. Rashid was doing, on the other hand, does hurt. Or it should hurt. And if it doesn’t hurt, then maybe that tells us something too. Also, I think Mr. Rashid owes someone the cost of 39 beers.

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© 2024 Todd Lebowitz, posted on WhoIsMyEmployee.com, Exploring Issues of Independent Contractor Misclassification and Joint Employment. All rights reserved.

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Filled Up With Rules? Temp Worker Laws Are Still Being Challenged

Teacher, don’t you fill me up with your rules (fn1)

Brownsville Station was a rock band formed in Ann Arbor in 1969. (Go Blue!) Their biggest hit, Smokin’ in the Boys Room, reached #3 on the Billboard charts and was later covered by Motley Crue. The song was Motley Crue’s first Top 40 hit. Apparently LeeAnn Rimes covered the song too in an album called Nashville Outlaws: A Tribute to Motley Crue, which is I guess was her tribute to a tribute to Brownsville Station.

Business groups in New Jersey and Illinois have also been pleading don’t you fill me up with your rules – in particular, rules related to the use of temp workers.

As discussed here and here, these two states passed temporarily worker laws that required temps to be paid wages and benefits equivalent to the regular workers they are supplementing.

Those rules are both in effect, but there are still several moving parts you should know about.

In Illinois, a judge struck down the portion of the law that required payment of equivalent benefits, ruling that this portion of the law was preempted by ERISA. Illinois lawmakers are now considering options to amend the law to require the payment of the value of benefits, if not the benefits themselves.

In New Jersey, the law took effect, but there’s an active lawsuit in which staffing and other business groups have challenged the law. The case is pending. New Jersey Staffing Alliance et al. v. Fais et al., No. 1:23-cv-02494, D. N.J.

For now, these two temporary work laws remain in effect, except for the benefits aspect of the Illinois law. But the situation remains fluid. It also would not be surprising if other states enacted similar laws. Companies using temp labor should continue to monitor these developments.

fn1 – Everybody knows that smokin’ ain’t allowed in school.

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© 2024 Todd Lebowitz, posted on WhoIsMyEmployee.com, Exploring Issues of Independent Contractor Misclassification and Joint Employment. All rights reserved.

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