From AMNY, Rachel Demarest Gold discusses a recent New York case in which an appellate court reversed a lower court’s determination that workers were not employees based on the control exercised by the putative employer and reminds employers that they cannot choose to make workers independent contractors but must their classification must be determined by application of the law. Rachel writes:
On more than one occasion, an employer has looked me in the eye and told me they “chose” to “put” certain workers on a 1099 instead of a W-2.
I understand the impulse. It can feel like a business decision — a matter of internal classification, paperwork, flexibility. It is not.The ‘Boar’s Head’ ruling: When ‘independent contractor’ is just a label
The Appellate Division, Second Department recently reversed a trial court decision that had dismissed Labor Law claims brought against Boar’s Head Provisions by three of its distributors. Each of these distributors had operated as an “authorized distributor” of Boar’s Head products for years — on paper, an independent business. In practice, the court found, the picture looks considerably different.
The complaint alleges that Boar’s Head controls virtually every meaningful aspect of how distributors run their operation: Work hours, pricing, marketing, uniforms, vehicle design, and even the cosmetic presentation of products. Boar’s Head required its approval before a distribution route could be sold from one authorized distributor to another, and it prohibited distributors from engaging in any other food-related business.
The trial court dismissed the Labor Law claims on the theory that the distributors were not employees. The Second Department disagreed. Under New York’s standard, the critical inquiry is the degree of control the putative employer exercises over the results produced or the means used to achieve those results. Where that control is more than incidental, a question of fact arises — and that question belongs to a jury, not a motion to dismiss.The standard
How to classify a worker is not a business preference. It is a legal standard established by multiple variables — and in New York, that standard is guarded by worker advocates and aggressively enforced by agencies.
Read the full story at Expert Analysis | Employer risk alert: You can’t ‘choose’ a 1099, and the ‘Boar’s Head’ decision | amNewYork