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Showing 5 posts in Independent Contractors.

NY Transit Agencies Escape Vicarious Liability for Contractors Alleged Discrimination

It is not uncommon for companies to contract their daily business operations to third-party companies. In Motta et al v. Global Contact Services, Inc., the court addressed whether such relationships relieve the outsourcing company of any duties to address discrimination or harassment in the workplace. More ›

New Federal Trade Secrets Protections for Employers

Both the U.S. Senate and House have passed the Defend Trade Secrets Act of 2016, and it is expected to be signed by President Obama in short order. More ›

Tax Court Finds Masonry Contractors to be “Employees”

In this case, the employer, an S corporation that operated a masonry subcontracting business, treated its workers as independent contractors and not employees. The workers were hired on a per-job basis, brought their own tools to the jobs, were free to work for other employers and were paid on a piecework basis in cash. The payments made to the workers were often not adequately recorded and minimal documentation existed. The employer was then selected for an employment tax audit through which the Internal Revenue Service (IRS) determined the workers should have been categorized as employees. As a result it determined the employer owed employment taxes it should have originally withheld, along with penalties and interest on these amounts and penalties for the failure to file returns and remit these amounts. More ›

Ninth Circuit Requires Application of California Law over Contractual Choice of Law Provision

A class of truck drivers filed suit against a home delivery and transportation logistical support services company claiming alleged violations of the Fair Labor Standards Act and various related California labor laws, including failure to pay overtime, failure to pay wages, and unfair business practices. The company defended the claims by arguing that the drivers were not employees, but instead were independent contractors, and pointed to the Independent Truckman's Agreement and Equipment Lease Agreement signed by the drivers. Further, because the Agreement contained a provision indicating that Georgia law was to apply to any disputes relating to the relationship, the company claimed that Georgia law confirmed that the drivers were not employees and thus could not maintain their claims. After motion practice and a bench trial, the district court agreed with the company and found that not only did Georgia law properly apply to the dispute, but that under Georgia law, there is a presumption of independent contractor status and that the drivers could not establish the existence of an employer-employee relationship. The Ninth Circuit Court of Appeals, however, disagreed with the trial court's analysis, at least in part, and reversed the decision. The Court of Appeals found that the district court failed to consider whether applying Georgia law would be contrary to fundamental California policies, and whether California had a materially greater interest in the resolution of these issue than did Georgia. Since the Court of Appeals found Georgia law to directly conflict with California law on the presumptions and burdens involved in the consideration of independent contractor status, and because worker protection is a fundamental public policy in California, the application of Georgia law would be improper. Finding that California law applied to the dispute, the case was remanded with instructions for the district court to reconsider the issues in light of California law. You can read more about the Court's decision and why it ultimately determined that the company's choice of law provision and Georgia law did not apply hereMore ›

NLRB Finds Symphony Orchestra Musicians “Employees” and Makes way for Petition

On December 27, 2011, the National Labor Relations Board found that musicians at three different symphony orchestras in Pennsylvania, Massachussetts, and Texas were “employees” and not “independent contractors.” In reaching this decision, the Board found that though musicians have some control over their work, once they are selected, orchestra management has great control over the musicians in terms of their work hours, payment schedules, dress codes, and standards of behavior. This ruling overturns the Regional Director’s 2007 Decision and Order in which she found that the musicians in the petitioned-for bargaining unit were independent contractors, and the dismissal of the representation petition. By virtue of the new rulings, the employees may now proceed with their petitions. 

Misclassifying workers as “independent contractors” when they should be “employees” can be costly for employers. 

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