Employer Alert: NLRB Changes Independent Contractor Standard

The National Labor Relations Board (NLRB) has announced that it will revert back to the long-standing common-law test for determining independent contractor status. This overrules a 2014 NLRB decision, which modified the common-law test by limiting the impact of entrepreneurial opportunity for economic gain.

The Board came to its recent decision in the case, SuperShuttle DFW, Inc., which found that SuperShuttle franchisees at the Dallas-Fort Worth Airport are independent contractors. When analyzing the relationship between SuperShuttle and these franchisees, the NLRB found that the franchisees’ autonomy and nearly complete control over their daily work schedule, their compensation structure, and the leasing or ownership of their shuttle van collectively concluded that the franchisees had the entrepreneurial opportunity for economic gain, and were therefore independent contractors.

In light of the SuperShuttle DFW, Inc. decision, “entrepreneurial opportunity” again becomes a key principle, along with employer control, in evaluating whether a worker is an employee or an independent contractor. Although no one factor controls the determination of whether a worker is an employee or an independent contractor, each factor is now likely to be evaluated in the context of “entrepreneurial opportunity” on the part of the worker. We recommend that our clients consider this standard and carefully classify workers as either employees or independent contractors in an effort to avoid future claims and/or penalties.

For more information  

For more information or if you have questions about complying with the new standard, please contact Matthew R. Plain or Greg Vanden-Eykel, or by phone at (401) 273-7171 or (617) 654-8200.

Barton Gilman provides comprehensive legal guidance to a wide variety of employers on all aspects of the employment cycle—from hiring through separation—including personnel policies and handbooks, non-compete agreements, and representation before state and federal courts and agencies. To learn more, please visit www.bglaw.com/services/labor-employment/.