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Misclassifying Employees as Independent Contractors Under the NLRA
By: Eric Turner

Merely misclassifying employees as independent contractors, by itself, does not violate the National Labor Relations Act, according to a new ruling by the National Labor Relations Board.

The issue in this case arose after a logistics company fired a driver after she complained about being misclassified as an independent contractor. The Board agreed that the act of firing the driver for complaining violated the NLRA, but disagreed that the initial act of misclassification itself violated federal law for interfering with workers’ rights to organize. The Board determined that the act of telling workers they are independent contractors is not considered a threat of reprisal unless there is more. For example, the Board has found in other cases that an employer violates the NLRA if it expressly prohibits workers from engaging in otherwise protected activities because they are independent contractors.

The Board agreed with employer advocates who argued that if misclassification alone violates the NLRA, then it would significantly curtail the use of independent contractors and penalize employers for honest mistakes. The Board recognized that whether a worker is legally considered an employee or an independent contractor is not always clear cut and depends on a variety of factors.

Labor law violations are one less thing for employers to worry about when classifying workers as independent contractors. However, misclassification still poses many other concerns for employers, such as tax law issues, workers’ compensation issues, employee benefit issues, and numerous wage-and-hour law issues.


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Jason Lacey, the Employee Benefits Guy
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