INDEPENDENT CONTRACTOR STANDARD – CHANGED BY NLRB
INDEPENDENT CONTRACTOR STANDARD – CHANGED BY NLRB
On June 13th, the National Labor Relations Board (“NLRB”) implemented a new ruling that brings about significant changes to the criteria employers employ when determining whether an individual qualifies as an independent contractor. The ruling rejects the previous SuperShuttle ruling, which emphasized entrepreneurial opportunity as the primary factor in assessing independent contractor status. Instead, the NLRB now calls for considering entrepreneurial opportunity alongside a set of traditional common-law factors.
The common-law factors encompass elements such as the degree of control exerted by the employer over the work’s specifics, whether the work is typically performed under the employer’s supervision or without it, whether the worker engages in a distinct occupation or business, the level of skill required in the occupation, whether the employer provides tools and a workplace, the duration of employment, the method of payment (hourly or per job), and whether the work is part of the employer’s regular business operations.
In this case, the creative workers lacked genuine entrepreneurial opportunities since there was no other opera company in the vicinity where they could showcase their talents and hypothetical opportunities should not be considered. This now makes it more challenging for employers to classify workers as independent contractors, thus making it harder for such workers to organize.
Employers should reassess their written agreements for independent contractors and evaluate their practical implementation, especially with the gig economy in the spotlight. Relying solely on payment methods or industry norms or what they did in the past is insufficient for classifying service providers as independent contractors. And ignoring this evolving area of law could lead to legal risks and significant financial exposure for businesses.
Things change. Here at Epps & Coulson, LLP, our employment attorneys keep on top of matters for you. We are ready to help you plan and grow. Please feel free to contact Dawn at: dcoulson@eppscoulson.com for any questions.
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