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Regulatory roundup: NLRB IC standard; Massachusetts’ joint-employer test

The NLRB is poised to abandon the current standard for determining whether independent contractors are properly classified under the National Labor Relations Act; Massachusetts’ High Court sets standard governing joint-employer liability under the Massachusetts Wage Act.

NLRB may return to Obama-era IC classification standard

The National Labor Relations Board seems poised to revert to a more worker-friendly standard for determining independent contractor or employee status, attorneys Joshua S. Fox and Sydney Cone wrote in a blog post [1]. However, courts may be less welcoming of another shift in the NLRB’s stance.

The board on Dec. 27, 2021, invited public input [2] on whether it should abandon the current standard for determining if a worker is properly classified as an independent contractor or is an employee under the National Labor Relations Act.

The current standard was set in the SuperShuttle DFW [3] case in 2019 by a Trump-appointed board. SuperShuttle itself had been a reversal of an Obama-era standard set in 2014 — FedEx Home Delivery — returning to a 10-factor standard:

  1. The extent of control which, by the agreement, the master may exercise over the details of the work.
  2. Whether or not the one employed is engaged in a distinct occupation or business.
  3. The kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the employer or by a specialist without supervision.
  4. The skill required in the particular occupation.
  5. Whether the employer or the workman supplies the instrumentalities, tools and the place of work for the person doing the work.
  6. The length of time for which the person is employed.
  7. The method of payment, whether by the time or by the job.
  8. Whether or not the work is part of the regular business of the employer.
  9. Whether or not the parties believe they are creating the relation of master and servant.
  10. Whether the principal is or is not in business.

The case before the NLRB now involves a determination of whether the workers – makeup artists, wig artists and hairstylists – are employees of The Atlanta Opera Inc. or independent contractors. In reconsidering the standard, the board asks interested amici to provide responses to the following two questions:

  1. Should the board adhere to the independent-contractor standard established in SuperShuttle DFW?
  2. If not, what standard should replace it? Should the board return to the standard in FedEx Home Delivery, either in its entirety or with modifications?

While a reversal of the current SuperShuttle standard would have a significant impact on the employment status of gig economy workers under federal labor law, courts are unlikely to accept a new NLRB independent contractor test, according to a blog post [4] by Richard Reibstein in JD Supra. “Administrative ping pong by the NLRB has not been well received by the appellate courts when reviewing NLRB decisions including those involving independent contractor status,” Reibstein wrote.

Massachusetts Joint-Employer Standard

The Massachusetts Supreme Judicial Court in its Jinks v. Credico (USA) ruling last month established the appropriate standard governing joint-employer liability under the Massachusetts Wage Act.

At issue in the case was whether the so-called ABC misclassification test under the Massachusetts independent contractor statute should be utilized to determine whether an entity is a joint employer for purposes of the Wage Act. The court determined that the ABC test did not apply, and the appropriate test is set forth by the Fair Labor Standards Act (FLSA), which comprises four factors, whether the entity:

  1. had the power to hire and fire the individual,
  2. supervised and controlled the individual’s work schedules or conditions of employment,
  3. determined the rate and method of payment, and
  4. maintained employment records.

“Massachusetts courts now have clear instruction to apply the multi-factor joint employer test under the federal Fair Labor Standards Act to determine whether an entity qualifies as a worker’s joint employer for purposes of Wage Act liability,” according to a JDSupra blog post [5].

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