December 2014 Independent Contractor Compliance and Misclassification Update

independent contractor compliance

Every month Pepper Hamilton provide a great update on cases, regulatory and legislative initiatives and other current matters related to independent contractor compliance and misclassification.  I highly recommend that you subscribe to their email or RSS feed.  December’s update included a fascinating case in which a client of a staffing agency was not an employer of an independent contractor hired by the staffing agency.  It states:

CLIENT OF STAFFING AGENCY SUCCEEDS IN DEFENSE THAT IT WAS NOT AN EMPLOYER OF CONSULTANT HIRED THROUGH A STAFFING COMPANY AS AN IC. The U.S. Court of Appeals for the Third Circuit affirmed a district court’s grant of summary judgment that an Asian market research consultant was an IC and not an employee of Bristol-Myers Squibb (“BMS”), the company for whom services were being performed. BMS had contacted GfK Healthcare, LP (“GfK”) for help in locating a consultant. GfK in turn contacted a staffing agency, Scientific Search, who identified Yu as a suitable candidate. BMS contracted with GfK for Yu’s consulting services. GfK entered into contracts with Scientific Search and with Yu, stating that Yu would provide consulting services to BMS and report to McGrath. The court found that although some factors supported an employment relationship between Yu and BMS to some extent, “no reasonable jury could conclude that [she] was an employee of BMS.” The court noted that while BMS had some discretion in determining the assignments that the consultant would work on and provided her with office space and equipment during the contract period, it did not set the consultant’s compensation, benefits, or rate and method of payment, and did not have the authority to hire or fire her. The appeals court further found that BMS had no control over payroll, insurance, or tax records for the consultant. Yu v. McGrath, No. 14-1842 (unpublished opinion) (3d Cir. Dec. 30, 2014)…

See the full update at December 2014 Independent Contractor Compliance and Misclassification Update

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