The most compelling news involving independent contractor compliance and misclassification last month was not a class action lawsuit or a government investigation but rather a government study released by the Bureau of Labor Statistics of the U.S. Department of Labor. The study, discussed in more depth below, covers the…

Private equity firms regularly conduct due diligence of legal risks that could impact potential investments. Yet when considering whether to invest in a target company structured in whole or in part on an independent contractor (IC) business model, few PE firms consider IC misclassification exposure with a sufficient degree of…

Businesses can learn quite a lot from a legal challenge faced by others in the same industry. Recently, we noticed that a large health care system operating in seven states west of the Mississippi had been sued in a class action for allegedly misclassifying registered nurses (RNs) as independent contractors…

The most significant legal development in the past month in the area of independent contractor compliance was the enactment of California’s Freelance Worker Protection Act, which goes into effect on January 1, 2025. We have reported on freelance pay protection laws enacted recently in Illinois and New York,…

Many commentators will likely suggest that the law involving independent contractor misclassification will become more favorable to businesses and less favorable to workers with a change in the White House. While things will not likely get worse, they will not likely improve one iota.

Right now, under the Biden Administration,…

Is independent contractor misclassification, standing alone, a violation of the National Labor Relations Act? Last month, the National Labor Relations Board issued a decision in a case involving workers who were found to be misclassified by a company as independent contractors. While the NLRB did not answer the question above,…

One of the most important legal developments last month is a new lawsuit filed by registered nurses against a leading health care system alleging that they have been misclassified as independent contractors instead of employees. The proposed class and collective action was filed late last month in a federal district…

The legal developments in the area of independent contractor misclassification and compliance last month include cases against a record label company, an Islamic Center, and a waste recycling company. Lawsuits for IC misclassification come from a diverse array of workers because companies in an endless number of industries have adopted…

You may have wondered where New York’s so-called Freelance Isn’t Free Law went after it was enacted into law in November 2023. Well, it was repealed before it became effective and was replaced earlier this year with a new version of the same law. The 2024 edition becomes effective on…

Last month, two key legal developments in the area of independent contractor misclassification and compliance highlighted the risks posed to customer service companies that use an independent contractor business model. The first involves a Colorado company using agents to provide customer support through an app-based platform. The company was sued in a proposed class and collective action lawsuit based on the allegation that the company misclassified the agents as ICs and not employees. The second involves a $3 million settlement between a nationwide customer service support company and the U.S. Department of Labor, which sued the company alleging it had misclassified as ICs the workers that provide customer service to its clients. Many companies in the customer service industry use an independent contractor business model. Workers in that type of trade or occupation usually can be classified legally as ICs under federal and most state laws if their relationships with the companies engaging their services is structured, documented, and implemented in a manner that enhances compliance with those laws. One way some companies have elevated their level of IC compliance is by a process such as IC Diagnostics (TM), a comprehensive system that minimizes IC misclassification liability in a customized and sustainable manner consistent with applicable laws.…