Overview
On January 25, the National Labor Relations Board (NLRB) reversed an Obama-era decision addressing the standard for distinguishing between independent contractors and employees. The prior NLRB held that if a worker is economically dependent on the business providing the work (i.e., the business provides most or all of the work done by that worker), then that person is most likely an employee, not an independent contractor. The Trump-appointed NLRB majority reversed that "economic dependence" standard in its recent Super Shuttle decision, 367 NLRB No. 75 (Jan. 25, 2019), holding instead that it will analyze independent contractor vs. employee status using the traditional 10-factor common law test viewed through the prism of "entrepreneurial opportunity."
That means the Trump Board will likely find independent contractor (and not employee) status if the putative contractor has the independence to make more or less by doing more or less either within the contractual relationship at issue or with other businesses (i.e., a broad “scope for entrepreneurial initiative"). The more control a single business exercises over a putative contractor, the narrower the scope for enhanced money-making initiative, and the more likely the NLRB will find employee status.
Please contact, Steve Wheeless, head of the Steptoe Labor & Employment group, if you have questions or want to discuss how this new test might apply to contractor/employee situations you may face.