From Floor Daily, Bradford Harvey discusses the risks of misclassifying c workers as independent contractors instead of employees. Bradford reviews the standards for the IRS, Department of Labor and state agencies and offers guidance on how to maintain an independent contractor relationship. Bradford also discusses cases that may be relevant to the flooring industry. Bradford writes:
FLOORING INSTALLER CASES
The flooring installer industry has not been immune from scrutiny. Several recent cases provide insight as to the risks involved and key factors in analyzing independent contractor status.
In Shepard v. Lowe’s this January, Lowe’s settled a class action lawsuit with home improvement contractors for $6.5 million. The contractors, who installed products purchased from Lowe’s, including flooring, argued that Lowe’s maintained the right to control the work by requiring that installers identify themselves as “installers for Lowe’s,” wear hats and shirts with the Lowe’s logo at work sites, attend training conducted by Lowe’s, and comply with Lowe’s production requirements.
In March an employer challenged an audit finding that it owed back industrial insurance premiums for its contracted flooring installers, in the case of B&R Sales v. Washington Department of Labor & Industries. The employer argued that the installers were not covered under the Washington Industrial Insurance Act because they used their own specialized flooring equipment. The court determined that the “essence” of the contracts focused on personal labor and, consequently, the employer had to pay industrial insurance premiums.
The case of Harris v. Bowlin Group in 2013 involved cable installers, rather than flooring installers, but is noteworthy in that the same principles apply, and the working circumstances can be similar. A group of 77 installers settled for a payment of $1,075,000 in back wages and liquidated damages under the Fair Labor Standards Act (FLSA).
The Department of Labor won $1.5 million under FLSA claims based on the misclassification of cable installers in the 2011 case of Solis v. Cascom. Among other considerations, Cascom directed installers on how to perform their work, provided training, required assignments to be accepted, required installers to account for all materials daily, and required installers to check in with supervisors before leaving the field. Additionally, the contracts that the installers entered into suggested that Cascom had the right to control the manner in which they performed their work and could change the agreement at any time.
In Williams v. Williams from 2001, a nurse slipped on glue that a carpet installer put down on the floor and then sued the carpet retailer, which claimed it was not liable because the installer was an independent contractor. The court found that the installer was an independent contractor after applying the control test. The carpet retailer did not provide any specific direction concerning how the installer was to do the job, did not supervise the job, and the installer invoiced the retailer for the work.
The court applied the control test in the 1999 case of Cohen Furniture Co. v. Department of Employment Security and held that the flooring installers were employees. Cohen exercised control over the installers when it determined which installer would be hired for an installation job, issued all job assignments, established a routine for the installers to follow for each assignment, reimbursed the installers for expenses, set quality standards for the installation work, and determined all manners of pricing and payment.
Read the full story at Independent Contractor or Employee: Agencies are cracking down on retailers