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 Well, it was repealed before it became effective and was replaced earlier this year with a new version of the same law.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.…

Lawyers representing ride share drivers have argued for years that their clients are being misclassified as independent contractors under federal and state laws. They have attained little success, however, obtaining definitive rulings in their favor, particularly in states that have adopted a multi-factor test for independent contractor status, like the federal standard under the Fair Labor Standards Act (FLSA). Two consecutive hung juries in a Pennsylvania federal district court confirm that the classification status of ride share drivers is unclear. These events serve as a rejoinder to worker advocacy groups that have repeatedly asserted that ride share companies misclassify drivers. While their arguments have led to rulings in favor of employee status in the two states with strict ABC type wage laws (California and Massachusetts), the recent hung jury results in Pennsylvania confirm that independent contractor status of ride share drivers is at best murky in state and under federal law. Nonetheless, ride share and other gig economy companies can tilt the scales in their favor. Many businesses have resorted to a process such as IC Diagnostics (TM) to enhance the structure, documentation, and implementation of IC relationships in a customized and sustainable manner, maximizing compliance with IC laws and minimizing exposure from IC misclassification claims.…

Class action independent contractor misclassification cases continue to be filed and most seem to settle, often for large sums, as we have reported in our blog posts on legal developments each month. But some industries have countered this trend in one of three ways: legislation, voter initiatives, and a choice not to settle but rather vigorously defend. Two of those approaches were on display last month. In one, the real estate industry in New Jersey effectively used the legislative approach. In the face of what it regarded as a likely industry-altering development if the strict ABC test for IC status under the New Jersey wage payment and wage and hour laws was applied to certain real estate salespersons in that state, the industry sought a legislative change. In 2022, the New Jersey legislature amended the real estate law to exempt real estate salespersons from the state’s ABC test. Last month the New Jersey Supreme Court held that the law not only overrode that strict test for IC status, but it did so retroactively. Another industry used the vigorous defense approach in a class action invoking the wage payment law in Pennsylvania. That case involved a well-known baked goods manufacturer, which successfully secured a federal court appellate ruling that it was entitled to summary judgment holding that distributors of its food products were properly classified as ICs. Although other food product manufacturers had not prevailed in similar class and collective action cases initiated by distributors, this case demonstrates that structuring, documenting, and implementing IC relationships in a manner that maximizes compliance with IC laws – the three key steps in a process such as IC Diagnostics (TM) – can lead to successful results in court, especially in situations involving well-compensated independent contractors.…