Employee or Independent Contractor?

Were Truck Drivers Employees Despite Terms of Agreement?

truck delivery

From Bloomberg BNA —

The drivers were employees under the Kansas Wage Payment Act, not independent contractors excluded from the state law’s protection, the Kansas Supreme Court said.

The state supreme court had not established a test to distinguish employees from independent contractors under the KWPA, but said it would apply a 20-factor test that it used in state workers’ compensation cases and that “includes economic reality considerations, while maintaining the primary focus on the employer’s right to control.”

The company’s agreements with drivers were structured to depict the drivers as independent contractors, but a “compelling factor” was how the agreements were implemented, the court said.

The employer required drivers  to purchase vehicles, clothing, tools and certain equipment.

The company supervised drivers in extensive detail and typically maintained long-term relationships more consistent with an employment relationship than with an independent business relationship, the court said. The company’s “control and micromanaging” were inconsistent with its claim that the drivers were independent contractors, it said.

The court expressed skepticism of the company claim that the drivers had profit-and-loss opportunities. “To truly have the ability to make a profit, a business owner must have control over the amount of revenues generated and control over the amount of expenses incurred.”

Company specifications about the drivers’ vehicles, clothes and other items made it impracticable for drivers to reduce expenses, while the drivers’ revenue depended on the company making more packages available for delivery, the court said.

The company “established an employment relationship with its delivery drivers but dressed that relationship in independent-contractor clothing,” the state supreme court said, ruling in answer to the federal appeals court’s first question that undisputed facts show the drivers to be employees as a matter of law….

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