The companies initially classified the drivers as employees but converted them to independent contractors in 2010. As independent contractors, drivers were not paid overtime, minimum wage, or reimbursed for the costs of operating and owning or leasing their vehicles. The change in classification reflected an attempt to keep up with competitors who treated drivers as independent contractors pursuant to a common industry practice.
The District Court evaluated the relationship between the companies and drivers and ultimately found the drivers should be classified as employees based on the FLSA’s economic realities test. For example, the company controls the manner in which the work is performed in several ways including requiring drivers install a specific cell phone application for GPS tracking, requiring drivers wear uniforms, and preventing drivers from freely rejecting work. The drivers have little ability to profit depending on their own managerial skills because of limitations on hiring their own employees and working for other employers. These and other factors outweigh the fact that the drivers invest in their own vehicle, cell phone, uniform, fuel, and insurance, which tend to weigh in favor of an independent contractor classification.
This case is an important reminder that industry practice is not a defense to worker misclassification, and businesses should conduct a careful analysis to ensure compliance with federal and state law. For questions on classifying your workers as employees or independent contractors, contact Heather Fossity at firstname.lastname@example.org or (503) 276-2151.
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Las Alertas electrónicas son escritas por abogados de Barran Liebman para sus clientes y amigos. Las Alertas no son proveídas como asesoramiento legal, sino solo como anuncios de leyes de empleo, leyes laborales y beneficios de empleo. Si esto ha sido remetido a usted y quisieras empezar a recibir las Alertas directamente, por favor mándanos un correo electrónico o llama a Traci Ray al 503-276-2115. Derechos de autor ©2019 por Barran Liebman LLP.