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Employee vs. Independent Contractor: Do You Know the Difference?

Employers take a risk when they classify someone performing services for them as an independent contractor instead of an employee. Because employers owe contractors far fewer obligations than employees, employers risk each of the following if a court determines that a misclassification occurred:...

Four Reasons to be Careful about Contingent Workers

Two weeks ago, I wrote about whether harassment training should be offered to employees in "the Twilight Zone" -- mainly, lead persons and contingent workers (temporaries and independent contractors). Reader Paul C. suggested that I do a post on the dangers associated with keeping "temps"...

Oregon Court of Appeals Clarifies When a Worker Is an Employee (Not an Independent Contractor) for Unemployment Tax Purposes

It is important to know when an individual is an employee, but statutes, regulations, and agency interpretations don't always use the same definition. Court decisions applying these rules repeatedly demonstrate that businesses cannot assume, without careful consideration, that a given worker is not...

The Expiration of a Contract and Its Effect on an Arbitration Provision

In Huffman v. The Hilltop Companies [ an enhanced version of this opinion is available to lexis.com subscribers ], the 6th Circuit addressed an issue of first impression: the application of the strong presumption in favor of arbitration in a post expiration setting when the arbitration clause is not...

"Jail 'Em" Says Pennsylvania Senator About Employers Who Misclassify

I've written here recently about the one-sided Criminalization of Employment Law . It seems that employees are getting tossed in jail while scofflaw employers sail off in their yachts laughing at the 99%. Well, at least one state Senator is doing something to balance things out. Senator Mike Stack...

Is This the End of the Independent Contractor As We Know It?

In Alexander v. FedEx Ground Package Sys. (8/27/14) , the 9th Circuit Court of Appeals concluded that FedEx’s delivery drivers are employees of the company, not independent contractors [an enhanced version of this opinion is available to lexis.com subscribers] . The opinion’s introductory...

States With Pro-Employee Laws: Crackdown on Misclassification

Or, States That Don't Suck For Employees, Part III With wage theft rampant and employers trying to figure out ways to not pay employment taxes (and avoid application of employment laws), many employers try to say, "Boom! You're an independent contractor now." They shove an independent...

A Reminder About the Dangers of Employee Misclassification

The Ninth Circuit provided a clear reminder to companies to ensure that employees are not misclassified as independent contractors. In Alexander v. FedEx Ground , a group of full-time delivery drivers from FedEx challenged their status as independent contractors, asserting claims for employment expenses...

Not Your Typical Independent Contractor Case

The Michigan court of appeals does not frequently have the opportunity to review cases dealing with the issue of whether an individual is an independent contractor or an employee. In Cole v. Bada Bing Club and Atlantis Lounge [ an enhanced version of this opinion is available to lexis.com subscribers...

California Court Complicates Determination of Independent Contractor Misclassification Claims

A decision earlier this month by a California Court of Appeal in Dynamex v. Superior Court greatly (and unnecessarily) complicates the determination of whether an employee is an independent contractor or an employee, and in some instances makes it extremely difficult for an employer to defeat class certification...

An Über-Huge Lawsuit For The Employee/Contractor Distinction

Last week, two different California federal judges reached the same conclusion in two different lawsuits brought against two different ride-hailing companies, Uber and Lyft. O’Connor v. Uber Technologies, Inc. [ an enhanced version of this opinion is available to lexis.com subscribers ] and...

Department of Labor Set to Publish Guidance on Independent-Contractor Status

According to Employment Law 360 [subscription required ] , Department of Labor Wage and Hour Division administrator David Weil recently announced that he will shortly publish an “administrator interpretation” to clarify who qualifies as an independent contractor. The distinction between employee...

Ride-Sharing Companies Face New Challenge to Business Model

by Korey Clark One of the biggest obstacles facing ride-sharing companies like Uber and Lyft since coming into existence a few years ago has been getting permission from city and state regulators to operate. But having won that approval in many places, the companies are confronting a new challenge...

Department of Labor Aims to Crack Down on Employer Misclassification of Employees

by Anthony Kuchulis The U.S. Department of Labor (“DOL”) recently issued Administrator’s Interpretation No. 2015-1 (the “Guidance”) asserting that employers are increasingly misclassifying their workers as “independent contractors” rather than “employees...

6 Tell-Tale Signs, According to the DOL, That Your Workplace Is a Hot Wage-and-Hour Mess

In my younger days, I had a summer job in college where I clocked in at 9 and left at 5. They gave me a desk, a computer, training, a supervisor, job instruction, and a not-so-fatty paycheck. But, at least, nothing got withheld from my paycheck. They called me an independent contractor and gave me...

Department of Labor Weighs in on Employee vs. Independent Contractor Classification

One of my least favorite topics to teach in my employment law course is the definition of "employee" (vs. independent contractor, trainee/intern, volunteer, or something else). Why? There are several different tests; they can have a dozen or so factors each; and the kicker... some courts use...

Who Is an Employee? DOL Has Answers in Guidance on Independent-Contractor Status

I’ve written a lot in the past year about the distinction between employees and independent contractors under federal wage-and-hour laws ( here , here , here , and here ). To me, here is what it all boils down to (cribbed from my post, The “duck” test for independent contractors...

Third Circuit Employment Law 101: Independent Contractor or Employee?

Back when I first started this blog, when I believed that my blogging success would translate into Aston Martins and beach homes, rather than “Can you please email me a copy of your FMLA PowerPoint?”, I had a series of “Third Circuit Employment Law 101″ posts. Well, I don’t...

You’ve Been Warned – Those Independent Contractors Are Probably Employees

Are you still using “independent contractors”? Get out of here – you know they’re really employees! On Wednesday, I did a very short “breaking news” post on the new Interpretation issued by Wage and Hour Administrator David Weil on when workers are “employees”...

The Unintended and Unfortunate Consequence of Wage-and-Hour Reforms

Wage-and-hour reforms are all the rage. Yet, with reform comes a potential unforeseen price—businesses that simply cannot afford to stay in business. From Re/Code : Cleaning services company Homejoy is shutting down on July 31 after struggling to raise a big enough round of funding. The company...

Independent Contractor or Employee: Do You Pass the “Economic Realities” Test?

by Michael Marr In the first Administrator’s Interpretation issued in more than a year, the Department of Labor has recently weighed in on the debate over the misclassification of employees—a debate that has been stirred up of late by companies such as Uber , Lyft , and the now closed...

Employee or Independent Contractor? Third Circuit FLSA Edition

Few things in the law are as poorly defined as the distinction between independent contractors and employees. This will be the first post in a series dedicated to that distinction. One of the problems is that courts apply different tests depending on the underlying legal issue. Jurisdiction also matters...

Employee or Independent Contractor? Unemployment Compensation Edition

Yesterday, we reviewed the Third Circuit's classification test for employees under the FLSA . Next up: Pennsylvania's test for purposes of Unemployment Compensation. When does this come into play? Well, claimants are generally not entitled to UC benefits if they get fired from an independent...

Employee or Independent Contractor? Workers' Compensation Edition

Let's continue our tour through the different classification standards with the Pennsylvania standard for workers' compensation. You can also check out our previous episodes on unemployment compensation , and wage and hour . Now, back to business: While no hard and fast rule exists to determine...

Employee Misclassification Continues to Make News

by Michael Marr Just last month, GrubHub, DoorDash, and Caviar were sued in San Francisco Superior Court in lawsuits similar to those pending cases against Uber and Lyft. These three new lawsuits ask the hot-button question: are workers in the shared economy employees improperly classified as independent...