NLRB Takes A Stand In The Ongoing Misclassification Battle

October 20, 2016 Robert Sheen Employee Misclassification, Regulations

Employee Misclassification continues to be an issue, as more contract employment arises and information regarding health care, hours, wages, and tax liabilities are not being met by said contractors. At the end of August, the National Labor Relations Board issued an advice from 2015, making a very valid point about Misclassification. The advice memorandum highlights that wrongful classifications of independent contractors are in violation of the National Labor Relations Act.

The advice memorandum, issued on August 26, 2016, focuses on the Pacific 9 Transportation case (NLRB Case No. 21-CA-150875), where truck drivers for the corporation sought to form a union and were denied by their employer, Pac9, claiming that they were independent contractors. This, per the NLRB’s advice memo, is in violation of Section 8(a)(1) of the National Labor Relations Act. After thorough analysis, the Assistant General Counsel of the NLRB found that such decisions are determined based on a number of factors involving the contractor’s relationship with the “employer.” Of these factors:

• Extent of the employer’s control over the details of the work;
• Whether or not the individual is engaged in a distinct business;
• Whether the work in question is typically done independently or under employer supervision in the particular locality;
• The occupational skill required;
• The duration of employment;
• The method of payment;
• Whether the particular work is part of the employer’s regular business;
• The parties’ understanding as to whether they are creating a master-servant relationship; and
• Whether the principal (the employer) is in the same business as the individual (the employee or contractor).

The advice memo also references a previous case surrounding FedEx (NLRB Case No. 55) from 2014, where such factors were used in determining another employee classification. While more and more Misclassification cases are passing over the NLRB’s desk, it’s indicative of a growing trend where employers must learn how to adequately classify their workers as it can cost them heavily down the road.

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