Category Archives: Contingent Workers

12.21.17
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N. Carolina Strengthens Independent Contractor Enforcement Plan

North carolina independent contractor misclassification

With apologies to James Taylor, In my mind I’m gone to Carolina. That’s not because of Tarheels or Panthers or Hurricanes. It’s because North Carolina just enacted a law to make it easier for the state to identify instances of independent contractor misclassification.

Not only does the law help the state identify business that may be misclassifying workers, it also coordinates the state’s enforcement efforts. The law creates a process for state agencies to share suspected incidents of misclassification, so those businesses unlucky enough to take a hit on an unemployment claim can expect to hear from the Department of Labor and Department of Revenue as well. How sweet it is to be loved by you (and you, and you, and you).

The Employee Fair Classification Act creates an Employment Classification Section within the Department of Industrial Relations. Its role is to receive complaints from workers who suspect they have been misclassified, investigate them, and make it easier for the other state agencies to investigate them as well. Most of the law’s provisions go into effect December 31, 2017. Continue reading →

12.18.17
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EU Court Expands Penalties for Independent Contractor Misclassification

UK england independent contractor misclassification

Crikey! Across the pond, worker misclassification is a hot topic, and the European Court of Justice (ECJ) has turned up the heat on companies using independent contractors.

In a closely watched case, the ECJ ruled that a commission-only sales contractor who was  misclassified was entitled to receive payment for four weeks of annual holiday pay for the entirety of his engagement, 13 years, covering 1999 to 2012.  The case is King v Sash Window Workshop Ltd., decided 29/11/2017 (US translation: 11/29/2017).

In the US, back pay in misclassification cases is often limited to two or three years. Statutes of limitation generally limit how far back a worker can go when seeking a recovery. But what about Europe?

Continue reading →

12.14.17
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Ding-Dong, the Witch is Dead! NLRB Overrules Browning-Ferris

1168499F-959C-46D6-91E6-B5B695418DEF.jpeg

Remember the good old days, way back in 2014? You recall the time — back when David Letterman was still on the air and it was not yet illegal in New York to take a selfie with a tiger.

Yes, that was life before 2015, when the NLRB waved its magic wand, rewrote the definition of joint employment, and forced several of the planets to spin out of orbit. The Board’s decision in Browning-Ferris erased decades of precedent and caused bloggers everywhere to vomit profuse amounts of text and doomsday predictions.

For those of you who missed the news in 2015 (understandable if you spent the year focused on following the saga of Winston, the Aussie python who swallowed salad tongs), allow me to offer this quick refresher: The 2015 Browning-Ferris decision declared that, under federal labor law, a business would be considered a joint employer if it retained the right to exercise even a teeny tiny bit of control, and even if it never actually exercised that control.

Good news, citizens of earth! The planets realigned on Thursday, when the Board reversed its 2015 decision and reverted back to the old standard. The new standard is the old standard. (Got it?)

Continue reading →

12.07.17
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New Year’s Resolution: 5 Tips to Limit Risks of an Independent Contractor Misclassification Claim

new years resolutions independent contractor misclassification 2018You know deep down you’re not really going to run a triathlon or learn Mandarin in 2018, so how about a New Year’s Resolution that’s more realistic? Here are 5 things businesses can do to limit their risks of an independent contractor misclassification finding:

  1. Review and edit contracts. Independent Contractor Agreements should be customized for the specific retention, highlighting actual facts that would be helpful in opposing a challenge to independent contractor status.
  2. Review and modify facts. Almost every independent contractor relationship can be strengthened by finding ways you can give up control or memorialize ways that you do not ever intent to exercise control. Does it really matter what times of the day your contractor works? If you set hours and don’t need to, change that fact. Then memorialize it in the contract.
  3. Use a Vendor Qualification Questionnaire. Qualify your contractors before retaining them. Make them represent to you that they are really in business for themselves, have other clients, are not economically dependent on getting work from you, etc. These representations can be useful if the contractor — or the government — ever challenges the contractor’s classification by claiming the relationship is really employment.
  4. Assign a gatekeeper. You may have contractors that you don’t even know about because managers in parts of the business have retained outside help rather than ask permission to hire new employees. Create a process that requires managers to obtain permission from a particular person before retaining any outside labor.
  5. Be proactive. Examine the facts and circumstances of your independent contractor relationships now. Know where you stand on the risk scale. Then assess how you can make changes to better protect your business against a claim of independent contractor misclassification. There are almost always steps that can be taken proactively to limit your risks. Be ready.

Continue reading →

12.04.17
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Can You Pay a Bonus to Your Independent Contractors?

“I want my money!” — Pearl, in The Landlord.

If you haven’t seen this Will Ferrell short video from 1997, take a look. Pretty funny.

Everyone wants their money. Method of payment is one of many factors used to evaluate whether an independent contractor is properly classified or instead is an employee.

Payment by the hour is permitted, but this method of payment more closely resembles employment. Payment by the project, regardless of time spent working, is most appropriate for an independent contractor relationship.

Continue reading →

11.27.17
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Are Santa’s Elves Employees or Independent Contractors?

elves independent contractors or employeesFor roughly 200 years, Santa has been retaining seasonal help at his Arctic Circle workshop. His undersized non-union workers toil in an icy land that sits beyond the jurisdiction of U.S. employment laws, a wise move by Mr. Claus and his attorneys.

While children around the world ask silly questions like, Can I visit the elves? and What do elves eat? and How do they work so fast?, this blog asks the serious question that all adult businesspeople want to know: Are elves employees or independent contractors?

Spoiler alert for the children: The answers are No, Caribou, and Amphetamines.

The adult question takes some analysis. Let’s peek behind the wintry curtain.

Continue reading →

11.16.17
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Be Kind, Rewind: Here’s Why the Browning-Ferris Joint Employment Standard Is Going to Be Reversed

AF6DB19D-A636-4AB4-BFA8-7D592D57137FRemember when you used to go to the video store to rent VHS tapes and there was that little sticker on the tape cheerfully reminding you to “Be kind! Rewind!”  I know, half of you have no idea what I am talking about, but there used to be these things for watching movies before Netflix — no, not DVDs, before that — no, no, not cave drawings, after that.

Anyway, take my word for it. The point was, when you were done with your movie, you were supposed to rewind the tape so the next viewer could start over, back at the beginning of the film. It was the courteous thing to do.

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11.13.17
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Here’s a Tip a Cartoon Cat Would Love: Try This Edit to Your Independent Contractor Agreements

Independent contractor misclassification cat“Whenever he gets in a fix, he reaches into his bag of tricks!” Yes, boys and girls, I am talking about Felix the Cat, whose magical bag of tricks could be transformed to get him out of any treacherous situation. Don’t you wish you had one of those?

Well, I won’t share mine, but I can offer this tip, which may help you avoid a treacherous situation.

This weekend I was reading a California decision on independent contractor misclassification. (I do other, more fun things in my free time too, so don’t make fun. Ok, you should make fun a little.) While analyzing Right to Control factors, the court ruled that the worst fact for the business was that it could terminate the contractor at will. The ability to terminate a relationship at will, the court ruled, was the “ultimate” form of control! Really? I agree it’s a factor among many, but the “ultimate factor”? Come on.

Anyway, this problem is easily avoided with some creativity. Allow me to reach into my bag of tricks.

Continue reading →

11.09.17
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Are Prostitutes Employees or Independent Contractors?

D019E4C0-7B51-4597-BA1A-0C84C01105CF.jpegThere’s a headline I never expected to write. But apparently this is an issue in the Great State of Nevada.

I subscribe to a service that alerts me when new lawsuits are filed involving independent contractor misclassification disputes. This gem arrived in my inbox last week:

Sierra National Corp. dba The Love Ranch is suing the Nevada unemployment department. Apparently the State ruled that the Love Ranch’s lovely ladies were employees, not independent contractors. The Ranchers filed a lawsuit asking the State to open its files and show how it reached that conclusion. Here’s the description of the case:

Mandamus and public records. Petitioner, which operates a legal brothel, seeks to compel respondent to provide public records relating to respondent’s investigation and decision that the brothel’s prostitutes are employees, not independent contractors. Respondent agency’s blanket denial of the petitioner’s public-records request violates the state public records law. Continue reading →

11.06.17
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Don’t Wear Pajamas to Work: Be Careful Using “Statutory Minimum” Workers Comp Clauses in Subcontractor Agreements

Pajamas - Independent Contractor Agreements and Workers Compensation ClausesHave you ever had the dream where you show up at work or school in your pajamas or underwear? You’re exposed and embarrassed in the dream, and you can’t figure out why you forgot to put on regular clothes, right? (Please don’t tell me I’m the only one who’s had this dream. Please?)

You may be living this dream inadvertently in your vendor or subcontractor agreements. (And this is not what people mean when they say, “I’m living the dream!”)

Here’s the problem:

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