10.26.17
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Would You Like Some Pepperoni with Your (Oops) Joint Employment?

Joint employment pizza 31E83EC5-E554-428A-A5D6-37F13905C3B9According to pizza.com, “There are approximately 61,269 pizzerias in the United States.” That number seems pretty precise to me, not an approximation, but who am I to question something I read on the internet?

Approximately 4 of the 61,269 pizzerias are owned by a New Yorker named Paola P., who runs each of the 4 under a different LLC. Paola’s employees can be assigned to any of the 4 pizzerias on their workdays. Seems boring so far, but stay with me. Now say this three times fast:

Paola’s practice prompted problems since Paola P’s pizzerias were impermissibly positioning personnel to prevent paying overtime. 

Pity.

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10.23.17
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Court Rules that New Jersey is a Goat (sort of): a Note on Forum Selection Clauses

goat independent contractor misclassification forum selection clause Mary Kay caseThe Monty Hall puzzle is a brain teaser based on the game show, Let’s Make a Deal. The contestant is presented with three doors and must choose one. Choose the correct door and win a car. Choose either of the wrong doors and win a goat. (Note to rural readers: The puzzle is a first-world conundrum and assumes you’d prefer the car.)

Once the contestant chooses, the host opens one of the doors with a goat and asks the contestant whether he wants to stay with his original choice or choose the other unopened door. As explained here, the contestant should always switch doors, since switching provides a 2/3 chance to win. The math here is not intuitive, but read about it and you’ll understand.

The gimmick relies on the fact that the host knows what’s behind each door and will only reveal a door that hides a goat. The host never reveals a car.

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10.19.17
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Beware of Sinkholes When Running Background Checks on Independent Contractors

Sinkholes are terrifying. One minute you’re slowly and cautiously riding along a city street. Then the road buckles and disappears. I feel bad for this guy in the video!

A similar danger may lurk for businesses who perform background checks on independent contractors. You proceed cautiously, following the various legal requirements, then – BAM! – someone claims that by following those requirements, you’re treating the contractor like an employee. Whaaaaat?

Background check laws are full of technicalities and traps for the unwary. For pre-employment background checks, the federal Fair Credit Reporting Act (FCRA) requires:

  • a stand-alone disclosure form, disclosing that a background check may be run,
  • consent, and
  • pre- and post-adverse action notices (if adverse action may be taken).

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10.16.17
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Why I Can’t Give You a Template Independent Contractor Agreement

Independent contractor vs employee template independent contractor agreement - generic independent contractor agreement - IMG_1112I am often asked for a sample Independent Contractor Agreement. I do a lot of work in this area, so I should have plenty, right? Well, sure, I have drafted dozens, but they won’t do you much good.

A generic Independent Contractor Agreement that includes a few boilerplate recitals is of little value. A generic agreement probably says something like, “We all agree that you’re an independent contractor and not an employee. We won’t pay employment taxes for you. We’re not paying into your Social Security account or providing you workers’ comp or unemployment coverage. We’re not giving you benefits. You’re lucky if we let you breathe the air in our building. No, you know what, bring your own oxygen tank. You can’t use our air. You agree to all of this and you’ll like it. And Thank you sir, may I have another?”

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10.12.17
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Why You Should Limit Workplace Rules That Apply to Contractors (Twisted Sister Edition)

There are so many great songs about defying authority. What’s the best? Hard to say. The best video, though – that’s easy. We’re Not Gonna Take It by Twisted Sister. (Watch here, then thank me later. I could watch the first minute a hundred times. Say it with me: “What do you want to do with your life?”)

Rock may about breaking rules, but business is not. With your employees, there are lots of rules you want them to follow, and you probably list them in painful detail in handbooks, posters, flyers, brochures, catalogs, signposts, compendiums, directories, and mandatory worker inner eyelid tattoos.

What about independent contractors, though? To preserve independent contractor status, you already know you want to try to minimize your exercise of control. But some rules are needed, expecially for contractors who work on your site.

Here are some guidelines to consider:

Rules appropriate for employees, but not well-suited for contractors: Continue reading →

10.09.17
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NLRB Shifts to Republican Majority; Change in Joint Employment Doctrine Is Likely

NLRB joint employment william emanuelWatching the National Labor Relations Board is like riding a see-saw (a very slow one, and not a very fun one, but stay with me here).

Board members serve five-year terms and, when they expire, the President has the right to appoint a successor, with confirmation by the Senate. Predictably, under Democratic administrations, the Board tips toward union workers’ rights, and under Republican administrations, the Board tips toward protecting businesses.

With the late September confirmation of William Emanuel to the Board’s fifth (and tie-breaking) seat, the see-saw tipped back toward the side of protecting businesses.

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10.03.17
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Independent Contractor vs. Employee: An Ode to Tom Petty

With an unmistakable voice and powerful lyrics, Tom Petty will long be remembered as a musical giant. As I tuned into the SiriusXM Tom Petty channel on my drive home from work last night, I decided to honor his memory the only way I know how – by linking a bunch of his song titles to completely irrelevant points about independent contractor misclassification.

So, here it is, the subject of Independent Contractor vs. Employee, as told through the song titles of Tom Petty.

You Got Lucky. Businesses sometimes tell me that their independent contractors must not be misclassified because it’s always been done this way. The business has never been audited or sued. Ignorance, however, should never be mistaken for bliss. Just because your classification of workers as contractors has never been challenged does not mean it is correct. To all those businesses who may be misclassifying their independent contractors but have never been challenged, I would say, You Got Lucky.

Don’t Do Me Like That. This song reminds me of the common scenario where an independent contractor has been blissfully working for a business for many years. Everyone is happy with the arrangement – until they are not. The business cuts ties with the independent contractor, then the contractor files a complaint. The agency or judge, evaluating the facts of the relationship, concludes that the contractor was really an employee all along, and the business now owes back assessments or back taxes for several years of misclassification. To every independent contractor who has filed a claim, what the business really wants tell you is, Don’t Do Me Like That. Continue reading →

10.02.17
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Can Independent Contractor Misclassification Automatically Violate Federal Labor Law? (Hint: Yes)

[NOTE 9/2019: Not anymore. The information in this post has been superseded by a later NLRB decision. In Sept. 2019, the NLRB ruled that independent contractor misclassification is not an automatic violation of the NLRA.  It still can be, but it is no longer automatically a violation. Read more here.]

Here’s the original post:

The past two weekends, we have seen NFL players link arms in solidarity. They protest mistreatment and injustice in society, not mistreatment and injustice by their employers. In fact, there have been several instances where owners and coaches have joined in.

Had the players been protesting actions by their employers — their teams — their actions likely would be considered “protected concerted activity” under the National Labor Relations Act (NLRA). The NLRA grants employees the right to act collectively to protest terms or conditions of their employment. Employees have these rights even if there is no union.

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09.28.17
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For the Greater Good: When Do You Have to Pay Volunteers?

One of my favorite movies is Hot Fuzz, the story of an overzealous London policeman (Simon Pegg), who transfers to a small town where things are not as they seem. Throughout the movie, various characters declare that something is being done “for the greater good.” Watch the movie. I won’t play spoiler. After you watch, go to imdb.com and read more about all the subtleties you may have missed. Trust me on this one.

Anyway, this is the part of the blog post where I segue from a totally unrelated pop culture reference to something related to employment.

Today we’ll talk about volunteers — you know, those who perform work “for the greater good” (nailed it!).

Where is the line between volunteers and employees, and when must volunteers be paid?

The Department of Labor (DOL) is pretty tough when it comes to determining Who Is My Employee?  As explained here, a worker not in business for himself/herself is usually presumed to be an employee under the Economic Realities Test.

The DOL, however, recognizes an exception for work that is truly volunteer work — so long as it’s not wink wink nod nod really employment.

What’s the difference?

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09.25.17
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Update: Uber’s Misclassification Cases, Arbitration, and the Supreme Court

Independent contractor vs employee Uber misclassification lawsuit arbitration agreements IMG_1111Remember the children’s game called Red Light, Green Light? One ambitious youngster is selected as the traffic cop, who randomly shouts “red light” or “green light,” requiring all the children to run and stop and start in short bursts that would cause an adult human to tear an ACL.

That’s essentially what’s happening in the big Uber misclassification case that has been pending in California since 2014. The case is called O’Connor v. Uber Technologies and is being overseen by traffic cop / federal judge Edward Chen in San Francisco. If anyone ever gets to the finish line, it will eventually be determined whether Uber drivers are properly classified as independent contractors, rather than employees.

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