The construction trade is far from the only industry caught up in the debate over who’s really an employee and who isn’t. The problem has entangled exotic dancers, FedEx drivers, college interns and newspapers.
“It’s almost hard to name a field where it’s not an issue,” said David Madland, the managing director of economic policy at the Center for American Progress, a research center in Washington.
Facing a tight economy, a growing number of companies have sought ways to cut costs by wrongly classifying regular employees as independent contractors even though the work they do and how they do it may not have really changed, Madland and other labor experts said.
The debate shook up college sports this year when a National Labor Relations Board officer in Chicago determined that Northwestern University’s football players were not just athletes but also employees under the close direction of their coaches.
There’s no single test for determining whether a worker is an employee or an independent contractor. In most cases the issue boils down to control over who determines when and how the work is done and under what conditions. Did the workers have to be on the job at a certain time? Did they have to wear a uniform, for example, or could they work from home in their pajamas?
Last year, a group of 1,245 dancers at the New York-based Penthouse Executive Club reached an $8 million preliminary settlement after a federal court certified a class action lawsuit the dancers had filed alleging the club managers shortchanged dancers by not paying minimum wage and overtime.
Although newspaper carriers traditionally have been treated as independent contractors, the classification issue has arisen in that industry as well.
Two McClatchy newspapers in California, The Sacramento Bee and The Fresno Bee, are fighting lawsuits filed on behalf of a combined 10,000 carriers who claim they were wrongly identified as independent contractors.
While some newspapers have paid million-dollar settlements as part of similar suits, McClatchy and other newspaper companies have successfully defended their practice of treating carriers as independent contractors on various occasions.
Lawyers expect the judge to rule by the end of September on whether The Sacramento Bee carriers were properly classified. The Fresno Bee case is expected in court later this fall.
There also have been cases of so-called misclassification involving college interns and furniture delivery workers. Dozens of lawsuits have been filed on behalf of FedEx drivers.
Jacque Riordon is a former Internal Revenue Service assistant special agent in charge of the Denver field office who has experience catching tax violators. One job she considered after leaving the agency was for contract work at a consulting agency.
“But the contract they sent me looked more like an employment agreement, even though it said contract agreement,” she said. “They wanted to set my hours and dictate how I did my work and when I was in the office and when I could take vacations. And that’s not really the spirit of being a contractor.”