On January 25, 2019, the National Labor Relations Board (“Board”) chose to overturn an Obama-era Board decision that made it easier for workers to be classified as employees, rather than independent workers. The Board’s recent decision in SuperShuttle DFW, Inc., 367 NLRB No. 75 (2019), greatly broadens the independent contractor test under the National Labor Relations Act (“NLRA”) which previously subjected a myriad of workers to being categorized as employees if they did not render services as part of an independent business.
In SuperShuttle DFW, Inc., the Board reinstated the employer friendly independent contractor test which balances the following factors in order to determine if an “employer” exercises sufficient control over an individual to entail the individual is an employee:
The extent of control which, based on the agreement, the employer exercises over the details of the work.
If the person performing the work is engaged in a distinct business or line of work.
The type of skill required in the particular occupation.
If the kind of occupation is usually performed under the supervision or direction of the employer or if the occupation is executed by a specialist without supervision.
The length of time a person performed the work for the employer.
If the employer or person provides the place of work to perform the job or supplies the tools or instrumentalities required for the job.
Whether the work is or is not part of the employer’s regular business.
How the person performing the work is paid, whether by the specific job or by an amount of time spent working on a job.
Whether the employer is or is not in business.
If the parties believe they are creating an employer-employee relationship.
The Board found in SuperShuttle DFW, Inc. that airport shuttle franchisees were independent contractors. The Board found that the franchisees were not employees based on the facts that the drivers either owned or leased their work vans, which required the drivers to make a significant investment in the tools and instrumentalities of their jobs, they were responsible for and controlled their daily work schedules and working conditions, and they were paid by each customer per fare instead of hourly or daily. The Board concluded that franchisees were provided with a significant entrepreneurial opportunity for economic loss or gain, indicating that they were independent contractors and could not be categorized as employees.
The Board’s recent decision provides great benefits to businesses engaging workers for short-term or temporary services. Moreover, this decision restores a more logical, middle ground type analysis when determining who counts as an employee under the NLRA. However, employers should note that the entrepreneurial factor should not be an overriding consideration or trump card under the independent contractor analysis test. Rather, the test should balance all of the factors stated above to determine whether a worker should be deemed an independent contractor or an employee.
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