If the provisions of the Massachusetts Independent Contractor law are not enough to persuade employers they are better off classifying their workers as employees whenever possible, a recent decision against FedEx Home Delivery may help get them there. Earlier this Fall, the National Labor Relations Board decided that FedEx misclassified 20 of its delivery drivers as independent contractors. The NLRB did not apply Massachusetts law and heard the case in Connecticut. Applying what it likely a far easier standard for employers to satisfy, it nonetheless ruled against FedEx, determining that it had too much control over its drivers to treat them as contractors.
Control over a worker’s job duties/performance is one of three elements in the Massachusetts Independent Contractor statute; employers must prove they don’t exercise such control, then satisfy two other elements in order to beat back misclassification claims under this state’s law. Unless they do so, employers are automatically liable for three times the value of any wages, commissions and, perhaps, benefits the workers would have received but for their improper treatment as contractors. In addition, losing employers must pay their workers’ legal fees. Damages can be quite high when multiple employees are involved, as the recent $2 million settlement reached in a wage case by the Massachusetts Attorney General demonstrates. To make matters worse, workers who agree they are contractors cannot be held to their bargain, even when documented in writing.
Misclassification claims are quite common in Massachusetts, and large employers often must deal with them as class action suits that apply to large numbers of employees. Given the risks, all should take care to carefully analyze their employment practices to ensure compliance with the independent contractor statute and other wage-related laws, many of which carry the same triple damage/legal fee penalties.