NLRB Reinstates Pre-2014 Independent Contractor Test
One of the most challenging tasks for employers is how to determine whether an individual is an employee or an independent contractor. This classification is important because the National Labor Relations Act (NLRA) excludes independent contractors from the definition of employee. Thus, independent contracts are not afforded the rights or protections to self-organize, engage in union activities, or other protected concerted activity.
To determine whether an individual is an independent contractor or employee under the NLRA, the common law agency test is used. Under this test, factors such as: (1) extent of control the employer exerts over the individual’s work; (2) the skill required in the position; and/or, (3) who provides the work supplies are considered. None of the factors are decisive, but should be considered and weighed depending on the specific relationship. In 2014, the National Labor Relations Board (the Board) under the Obama Administration, in FedEx Home Delivery, essentially created a new factor under the common law agency test-“render[s] services as part of an independent business.” Under this factor, “entrepreneurial opportunity” was considered as “merely one aspect” of the inquiry.
On January 25, 2019, the Board issued a decision in SuperShuttle DFW, Inc. that reinstated the pre-2014 common law agency test for determining independent contractor status. The Board held, “going forward we will continue to consider how the evidence in a particulate case, (viewed as it must be) in light of all the common-law factors, reveals whether the workers at issue do or do not possess entrepreneurial opportunity.” Common law factors that suggest the individual had “entrepreneurial opportunity” weigh in favor of the individual as an independent contractor rather than an employee.
The reinstated standard allows more consideration to be given to an individual’s “entrepreneurial opportunity,” than the 2014 FedEx standard allowed. Additionally, the Board’s decision in SuperShuttle DFW, Inc. provides further clarity on the factors relevant to determine independent contractor status.
While employers may have more leeway to identify individual workers as independent contractors, the determination remains fraught with potential liability and should be carefully considered on a case-by-case basis. Especially in those cases where the treatment will apply to many employees, it is wise to seek legal counsel.
OSHA Issues Final Rule on Electronic Record Keeping
As of January 1, 2017, the Occupational Safety and Health Administration (OSHA) was requiring certain employers to electronically submit injury and illness data. However, after just a year of implementation, as of January 25, 2019, OSHA issued another rule (the Final Rule) rescinding the requirement that employers with 250 or more employees must electronically submit injury and illness information to OSHA via OSHA Forms 300 (Log of Work-Related Injuries and Illnesses) and 301 (Injury and Illness Incident Report). However, the elimination of the electronic submission requirement does not change an employer’s obligation under the Occupational Safety and Health Act (the Act) to complete and retain injury and illness records through Form 300 and 301.
The employers mentioned above and employers with 20-249 employees in “hazardous” industries must continue to submit information from Form 300A (Summary of Work-Related Injuries and Illnesses) electronically. Under the Final Rule, employers who are required to submit Form 300A electronically, must now also submit their Employer Identification Number (EIN) online. The Final Rule allows OSHA to divert its attention and resources toward the collection and use of the data provided through Form 300A. The Final Rule goes into effect on February 25, 2019.
Wage and Hour Issues
Recently, the Department of Labor has issued several opinion letters on wage and hour matters. For more information on those opinion letters and as a way to help you stay up to date on a broad range of wage and hour issues, please visit: https://www.minnesotawageandhour.com/.