A worker’s ability to obtain certain benefits, or be covered by a particular law, depends on the worker’s classification as an employee or independent contractor. Government agencies such as the U.S. Department of Labor, EEOC, IRS and National Labor Relations Board (NLRB) do not use the same test to determine this classification.
In a January 25, 2019, decision, the NLRB changed the test it had been using since 2014.
The 2014 test focused on economic realities, such as whether the worker is economically dependent on a company. If the worker was found to be economically dependent, the worker would have most likely been classified as an employee, rather than an independent contractor.
The NLRB’s new test returns to the method that was used before 2014. This method takes into account a variety of factors such as how much control the company has over the person’s work, and the type of relationship the parties believe they are creating. This tests broadens the spectrum for who is considered to be an independent contractor, and makes it somewhat easier to earn this classification.
Not all government agencies have adopted this new test. Employers should be cautious about relying on the NLRB’s approach when attempting to determine a worker’s classification. The particular circumstances of each worker should be taken into account.
Feel free to contact us if you have any questions regarding this classification.