Why Was a Carpenter Misclassified as Independent Contractor But a Truck Cleaner Was Not? March 2024 IC Legal News Update
Two court cases we summarize below, decided in March 2024, demonstrate that while some companies may prevail in an IC misclassification lawsuit, others do not. Why? As a starting point, the legal test for IC status under the federal wage and hour law differs from the test under most state wage laws, and a number of states have different tests for IC status depending on whether the claims are brought for unpaid wages, reimbursement of expenses, workers’ compensation, or unemployment benefits. Do cases typically turn on what law is applicable? Sometimes, but not usually. More often, it’s the facts that matter more than the law. For example, the first case reported below involves a carpenter who was found to have been misclassified as an IC. Yet, in a prior blog post, we reported on a case in which other carpenters were found to be properly classified as ICs. The different results have far less to do with the law than the facts in those cases. What these types of cases teach is that companies can minimize their misclassification liabilities, regardless of the applicable tests for IC status, if their IC relationships are structured, documented, and implemented in a way that maximizes compliance with most if not all IC laws. Can that be done? Yes, indeed many companies have accomplished that objective in a customized and sustainable manner through a process such as IC Diagnostics (TM).
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