Think You Know if You Are an Employee or an Independent Contractor? Think Again.
In the employment law area a great deal can turn on whether an individual is legally considered an “employee” or an “independent contractor.” Generally speaking independent contractors have fewer rights and protections than do employees, which is why the question of what category a person falls into is so crucial.
Now the funny thing about the law is that when a court issues an opinion a whole lot of things can change or at the least be called into question. For example, this past summer the Supreme Court of Washington issued its decision in Anfinson v. FedEx Ground Package Sys., Inc., which arguably established a new test for determining whether a person is an “employee” or an “independent contractor.”
The case involved a class action lawsuit brought by three of FedEx Ground delivery drivers who sought overtime pay under the Washington Minimum Wage Act. The drivers lost at trial when the jury found that they were “independent contractors,” not “employees.” The Court of Appeals reversed, and the Supreme Court upheld the decision of the Court of Appeals.
In its reasoning the Supreme Court rejected a jury instruction that was based on an eight-factor “right to control test” to help determine whether the drivers were “independent contractors.” The essence of this test is whether the entity (i.e. FedEx Ground) controlled or had the right to control specific details of the drivers’ performance of their duties.
Rather than limiting the inquiry to the issue of control, the Supreme Court held that the proper inquiry is “whether, as a matter of economic reality, the worker is economically dependent upon the alleged employer or is instead in business for himself.” In short, the inquiry is no longer about “control” but about “economic dependence.”
It will be interesting to see whether the Anfinson decision increases the number of lawsuits as people who were previously thought to be clearly “independent contractors” seek to establish their right to “employee” benefits like minimum wage and overtime compensation.