Worker Classification Cases Abound and the DOL Responds

Several more cases this week showed how worker (mis)classification remains a hot topic in the California employment law landscape.  One of the cases was settled for $295,000 when a class of trucking company driver managers brought claims that they were misclassified as exempt from overtime employees.  As opposed to many other misclassification cases, where workers sue to obtain “employee” status, here we have a class of drivers who sued to gain “independent contractor” status rather than remain employees.

R. England, the trucking company, utilized the driver managers to handle keys, track routes, handle customer issues, and input data into the company’s driver system. (See Mark Turner v. C.R. England, Inc.) However, the driver managers believed that they should have still been classified as independent contractors since they did not supervise nor made personnel decisions, and thus should have been paid overtime. Their argument touched on what we saw earlier this summer as both state labor laws and Fair Labor Standard Act (FLSA) violations.

The other case was a Redfin claim that worker misclassification lawsuits should be arbitrated because their independent contractor agreements specifically compelled arbitration.  More to follow.

Earlier this summer, the U.S. Department of Labor (DOL) issued a new “Administrator Interpretation” providing their opinion on how the FLSA identifies workers as employees instead of independent contractors.  See the DOL site for more info about misclassification.

This has been a hotly contested topic resulting in recent decisions classifying FedEx and Uber drivers as employees.  The accurate classification of workers is critical for providing the legal protections that employees (instead of independent contractors) receive especially in industries with low wage workers.

Specifically, the DOL offered advice as to what must be considered when applying the economic factors in determining whether a worker is an employee.  Some of these factors are (1) the employer’s control over the worker, (2) whether the work requires special skill (most likely a contractor), (3) whether the worker’s managerial skill is involved (again, contractor), (4) whether the relationship is permanent (employee), and (5) whether the work performed is an integral part of the business (employee).

However, the factors should not be analyzed on their own and no single factor, including the company’s control over the worker, should determine the exact classification.  Rather, each factor must be taken into consideration when determining whether the worker is in business for him or herself (independent contractor) or is economically dependent on the company (employee).  In conclusion, the DOL believes that these factors should be used as guides to arrive at an economic-dependence realization.

If you suffered an employment-related action related to your work classification or other employee rights, or know of possible discrimination or retaliation after reporting illegal or discriminatory conduct to government regulators, prompt action to preserve your rights is crucial.  Contact the experienced employment law attorneys at Stephen Danz & Associates for a free consultation to discuss your circumstances and legal options.