The National Labor Relations Board (NLRB) recently revised the standard that it will use to decide whether a worker should be classified as an employee or independent contractor under the National Labor Relations Act (NLRA).
The NLRA applies to employees. only The law gives employees the right to join a union and collectively bargain. So, if a worker is considered an independent contractor, they don't have NLRA protections.
In a 2019 decision, the NLRB's approach emphasized the role of entrepreneurial opportunity and a worker's ability to maintain control over their income. The more control and entrepreneurial opportunity a worker had over their income, the more likely they're classified as an independent contractor.
The NLRB's recent decision revised that standard. Going forward, the NLRB will consider the following factors to decide if a worker should be classified as an employee and be entitled to NLRA protections:
-- the extent of control exercised by the employer
-- the opportunity for profit or loss
-- the investment in equipment or materials
-- the skill required
-- the permanence of the working relationship
-- the degree of integration into the employer's business
If a company imposes restrictions on a worker's ability to provide services to other businesses or the worker's ability to make important business decisions as a contractor, then it's more likely that the NLRB will find that the worker is an employee.
That said, how the NLRB will weigh each factor listed above will be different depending on the circumstances of each case and the nature of the work involved.
Misclassifying someone as an independent contractor can lead to huge losses. This is one of the most complex areas of employment law. The NLRB's approach is only one of many ways employment laws consider independent contractor status.
Consult with legal counsel if your company works with independent contractors.
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𝘐 𝘩𝘦𝘭𝘱 𝘌𝘹𝘦𝘤𝘶𝘵𝘪𝘷𝘦𝘴, 𝘔𝘢𝘯𝘢𝘨𝘦𝘳𝘴, 𝘢𝘯𝘥 𝘏𝘙 𝘴𝘰𝘭𝘷𝘦 𝘸𝘰𝘳𝘬𝘱𝘭𝘢𝘤𝘦 𝘱𝘳𝘰𝘣𝘭𝘦𝘮𝘴.
𝘐𝘧 𝘺𝘰𝘶 𝘭𝘪𝘬𝘦𝘥 𝘵𝘩𝘪𝘴, 𝘍𝘰𝘭𝘭𝘰𝘸 𝘢𝘯𝘥 𝘩𝘪𝘵 𝘵𝘩𝘦 🔔 𝘰𝘯 𝘮𝘺 𝘱𝘳𝘰𝘧𝘪𝘭𝘦.
Great round-up! It's tough to keep up with all the changes sometimes.