Misclassification of Independent Contractors: A Challenge for Massachusetts Companies in the Delivery, Taxi, and Livery Sectors

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From The National Law Review  — “Although Massachusetts uses a seemingly straight-forward, three-prong test sometimes referred to as the ABC Test to determine whether an individual is properly classified as an independent contractor, Massachusetts is regarded as having one of the most – if not the most – restrictive statutes in the United States. Specifically, the individual must:

A)  Be free from the employer’s control;

B)  Perform services outside the usual course of the employer’s business; and

C) Customarily engage in an independently established trade, occupation, profession, or business.1

Notably, an individual is presumed to be an employee unless the company is able to rebut this presumption by satisfying all three criteria of the ABC Test….

In addition, the “B” prong of the ABC Test likely is the most onerous to satisfy. In the Advisory, the AGO provides the following examples of how it would apply the “B” prong:

  • A drywall company classifies an individual who is installing drywall as an independent contractor. This would be a violation of prong two because the individual installing the drywall is performing an essential part of the employer’s business.
  • A company in the business of providing motor vehicle appraisals classifies an individual appraiser as an independent contractor. This would be a violation of prong two because the appraiser is performing an essential part of the appraisal company’s business.
  • An accounting firm hires an individual to move office furniture. Prong two is not applicable although prongs one and three may be because the moving of furniture is incidental and not necessary to the accounting firm’s business….”

Read the full story at Misclassification of Independent Contractors: A Challenge for Massachusetts Companies in the Delivery, Taxi, and Livery Sectors

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