One of the most confusing areas of labor and employment law is the decision regarding whether a worker may be classified as an independent contractor, or whether the worker must be recognized as an employee. The stakes are high. Employees are entitled to all sorts of protections that independent contractors don’t get – unemployment benefits, leave rights (in Maryland), overtime pay (if non-exempt), protection against unlawful discrimination to name a few. Which explains why employers lean toward misclassifying workers as independent contractors.
What makes the issue so confusing is that each of the laws affected by a misclassification decision has a different test for determining whether the worker was properly or improperly classified as an independent contractor. The IRS has its test for income tax purposes. The DLLR has its test for unemployment benefits purposes. The Department of Labor has its test for overtime purposes.
And now, the National Labor Relations Board just changed its test for purposes of filing an unfair labor charge (a ULP) with the NLRB – something that employees may do, but which independent contractors may not. Employees can file a ULP against their employer, for example, if they believe they were fired simply for joining with other employees to complain about their working conditions – something called, “concerted activity.”
On January 25, 2019, the NLRB decided to go back to a standard that favors independent contractors – and, therefore, favors employers. Under President Obama, the NLRB had changed the test to be stacked against independent contractor classification – a move that favored employees. That decision now has been rejected.
The thought of navigating this quagmire makes most attorneys go weak in the knees. At Luchansky Millman, we deal with these issues every day. If you are facing a classification issue, give us a call at 410.522.1020.