Employee vs. Independent Contractor: What’s the Difference?

– The ongoing legal debate over worker classification as employees or independent contractors is relevant due to the rise of gig companies like Uber and Lyft.
– The Supreme Court’s 1968 decision, NLRB v. United Ins. Co. of America, established that the common-law agency test applies to employee-independent contractor classifications under the National Labor Relations Act (“NLRA”).
– In 2009, the court in FedEx Home Delivery prioritized “entrepreneurial opportunity” as a key factor in determining worker classification, but the NLRA Board under the Obama administration rejected this and reaffirmed the common-law agency test.
– Under the Trump administration, the Board adopted the court’s holding in SuperShuttle DFW, Inc., emphasizing “entrepreneurial opportunity” as the guiding principle for worker classification since 2019.
– However, this changed with the Board’s ruling on June 14, 2023, in Atlanta Opera. 1. In a 3-1 ruling, the National Labor Relations Board overturned its previous ruling and returned to the FedEx common-law agency test.
2. The Board will now consider factors such as whether workers can realistically work for other companies, have ownership interest in their work, and have control over important business decisions.
3. The current common-law agency test requires companies to take a holistic approach to various factors when determining worker classification.

https://bergersingerman.com/news-insights/employee-or-independent-contractor-the-debate-continues