Office Workers Misclassified as Independent Contractors

Workers in a meeting in an office

Photo by Climate KIC on Unsplash

 

From the November 2017 Independent Contractor Misclassification and Compliance News Update, Richard Reibstein discusses a case in New York in which two office workers were found to be misclassified as independent contractors.  Richard writes:

JURY VERDICT OF OVER A QUARTER OF A MILLION DOLLARS TO TWO OFFICE WORKERS MISCLASSIFIED AS IC’S IS UPHELD BY NEW YORK FEDERAL COURT. A New York federal court upheld a jury’s verdict that Aqualife, a company selling and servicing water filtration systems to the Russian-speaking community in New York City, violated the FLSA and the New York Labor Law as a result of the company’s misclassification of two office workers as independent contractors. The workers were awarded $106,431 and $67,126, respectively, in unpaid overtime and other compensation for office/clerical and sales-related work they performed for the company, plus legal fees. The court found that “the jury could reasonably have concluded that the defendants controlled the schedule, hours, pay, place of work, and tasks of the plaintiffs.”  Specifically, the court noted that there was evidence presented to the jury that both workers were “bound by the decisions of management”; they worked set hours each day; were paid on an hourly basis; clocked in and out; although they were allegedly promised commissions, such commissions were never or only sparingly paid, eliminating any prospect for individual economic success; some skill was involved in booking appointments, but it did not give rise to economic independence and did not require advanced training; and their business activities were strictly controlled by the company. Although the workers designated themselves as independent contractors on their tax returns, that factor alone was not dispositive.  Leevson v. Aqualife USA, Inc., No. 14-CV-6905 (E.D.N.Y. Nov. 1, 2017).

Read more at November 2017 Independent Contractor Misclassification and Compliance News Update

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