Since Massachusetts amended its laws in 2004, it has been very difficult for companies to legitimately treat workers as independent contractors. Although many companies have now put those “independent contractors” on the payroll, many still have not.
For a worker to be an independent contractor in Massachusetts, that worker would have to meet the following test:
1. The individual has been and will continue to be free from control and direction in connection with the performance under the contract.
2. The worker’s services are performed outside the usual course of business of the company.
3. The worker is customarily engaged in an independently established trade, occupation, profession or business of the same nature as that involved in the service performed.
Often companies in Massachusetts can’t meet #2, because both the individual and the company are essentially in the same business, and that ends the inquiry. For example, if an individual with a degree in accounting is working for an accounting firm on its accounting matters, the individual must be classified as an employee and not as an independent contractor. It doesn’t matter that the individual is working a reduced schedule, or used to be an employee and is coming back to the firm after a number of years.
Companies that are misclassifying workers as independent contractors may also be in violation of other wage and hour laws, such as laws requiring overtime pay, the payment of minimum wage, or meal break laws. Note that the IRS also has rules on classifying independent contractors, and a good start at looking at those rules is on the IRS website, here.
Often companies that misclassify workers as independent contractors are in violation of other laws. If you would like a free consultation regarding your situation at work, please call Boston, Massachusetts labor and employment lawyer Maura Greene at 617-936-1580 or email her on the home page.