In a recent decision, the National Labor Relations Board (NLRB) has changed how determinations will be made to determine whether a worker is an independent contractor or not. In previous decisions, the NLRB has said that it would prioritize the entrepreneurial opportunities of a worker to determine whether they qualify as an independent contractor. In this decision, however, they have said they will look to a wide variety of factors to determine if someone qualifies for that classification.
What Was This Case?
In The Atlanta Opera, Inc., 372 NLRB No. 95 (2023), a collection of workers represented by Make-up Artists and Hair Stylists Union, Local 798, IATSE, sued an opera company alleging they were improperly classified as independent contractors. The opera company employed them as independent contractors rather than employees, unlike many of the other workers at the company. As a result, they were not given employment protections given to other workers at the opera company.
What is the Issue At Hand?
The primary legal issue is whether or not these workers should be considered independent contractors under the law. Independent contractors are not afforded many of the legal protections that employees do, such as protection against discrimination, and they are personally responsible for their Social Security taxes rather than having them withheld from their paychecks (with half paid by their employer). The employer contended they were independent contractors due to them having entrepreneurial opportunities outside of the company, which is the most recent standard under SuperShuttle DFW, Inc., 367 NLRB No. 75 (2019). The workers instead stated they should be held to the older FedEx II standard from FedEx Home Delivery, 361 NLRB 610 (2014), which required looking at a broader set of factors.
What Did the NLRB Decide?
The NLRB ruled that the workers are employees and not independent contractors, reinstating the FedEx II standard. Under that standard, employers are required to look at a broader set of criteria, including:
- The amount of control an employer exercises over an employee
- If an employee is operating in a profession distinct from their employer or business
- If they typically operate alone or with supervision
- If they provide a part of the employer’s regular business
- If the occupation requires a significant level of skill
- If the employer or worker provides tools, materials and the place of work
- How long the worker has worked for their employer
- How the employee is paid
- If the employer and worker believe they are involved in an independent contractor relationship
- If the worker owns their own business
Depending on how these factors work in their totality, a worker may be considered an employee under certain circumstances. As a general rule, the more dependent a worker is on an employer and the less control they have over their work, the more likely they are to be considered an employee rather than an independent contractor.
How Could This Affect You?
If you are a worker, this is probably a good sign for you, since it makes it more likely you will be considered an employee instead of an independent contractor. This means it will be easier to obtain worker protections and avoid undue taxation and costs. However, to determine what might be best for your situation, you should speak to a lawyer with experience handling employment law issues.
Steven Mitchell Sack, the Employee’s Lawyer, is a New York employment lawyer with more than 42 years’ experience handling the many aspects of employment law. His new book, “Fired!: Protect Your Rights & FIGHT BACK If You’re Terminated, Laid Off, Downsized, Restructured, Forced to Resign or Quit,” is available in hardback, and contains valuable advice on dealing with employment and labor law issues. To purchase the book, feel free to contact Steven Sack at 917-371-8000 or visit the website at legalstratpub.com. To inquire about a legal matter, please feel free to contact attorney Steven Sack at 917-371-8000 or stevensackatty@hotmail.com.
