Clients are increasingly aware of the growing number of class action lawsuits across the United States. What should the worried company owner do? The logical response is to have independent contractors (or employees) sign a contract under which they agree to mandatory arbitration of all disputes, claims or causes of action arising out of or related to the independent contractor (or employment) relationship with the Company.
In September 2018, yet another lawsuit was filed against Uber, the ride-hailing company that has had several lawsuits filed against it, many about the classification issue of whether Uber drivers are employees or independent contractors. Uber has found some effective legal defenses in these lawsuits against it, so now a unique kind of lawsuit has been added to the lineup of lawsuits against Uber.
If you are acquiring a Company through purchase and you are not paying close attention to potential Labor issues, you could be creating serious and risky problems for the future. It is extremely important to understand that liability in the context of Labor and Employment related issues are governed by Contract and Common Law Successorship with an overriding theme of "protecting the little guy." This is vastly different from the traditional Corporate Veil Piercing Analysis that exists in traditional Corporate Law.
Exotic dancers can be properly classified as either employees or independent contractors depending on how the working relationship is structured. But when the independent contractors believe they have been misclassified and should have really been employees, lawsuits may result.
On September 22, 2017, Illinois Governor Bruce Rauner signed new legislation (effective July 1, 2018) called the Illinois Employee Misclassification Referral System Act.
The purpose of this article is to update readers on what has been happening recently with Illinois Department of Employment Security ("IDES") Hearings (and IDES audits) regarding the classification of owner-operator truck drivers (i.e., are they independent contractors or misclassified employees for purposes of Section 212.1?).
There is a wide variation, state by state, as far as the treatment of the independent contractor versus employee classification issue. Laws regarding independent contractor status and unemployment insurance benefits, workers' compensation coverage, overtime, etc. vary widely from state to state. Yes, there are also Federal laws which impact independent contractor status; but, increasingly, states are enacting new and creative laws requiring employers to "jump through hoops" as far as permitting independent contractor usage.
Good news for New Jersey employers who use independent contractors! Happily, the Superior Court of New Jersey Appellate Division [in Garden State Fireworks Inc. v. NJ Dept. of Labor, A-1581-15T2 (N.J. App. Div. September 29, 2017] recently decided that a pyrotechnics company's legal relationship with its independent contractor pyrotechnicians satisfied all three parts of the "ABC test" as laid out in New Jersey's definition of independent contractor status for unemployment insurance purposes.
If your Company is audited by the Illinois Department of Employment Security (IDES) and you use independent contractors, you will (almost always!) be asked to complete the IDES Worker Relationship Questionnaire for each group or type of independent contractor.
On Wednesday, June 7, 2017, the U.S. Department of Labor (US DOL) issued a three sentence statement trumpeted by national news and happily noted by many employers. The recently-confirmed Labor Secretary, Alexander Acosta, personally announced that he has withdrawn the US DOL'S two Interpretations on two key legal issues worrying many businesses: joint employment and independent contractors.