UPDATE SINCE ARTICLE WAS WRITTEN: In a March 3, 2017 decision, the U.S. Court of Appeals for the District of Columbia Circuit rejected the NLRB’s finding mentioned below that FedEx Home Delivery drivers were employees. The court agreed with FedEx that the drivers were independent contractors and therefore did not have the right to union representation under the National Labor Relations Act.
In its recent ruling in FedEx Home Delivery, the National Labor Relations Board (NLRB) added a new factor for the classification of a worker as an employee or an independent contractor. The NLRB found that a worker’s right to “entrepreneurial opportunity” was not solely sufficient to classify a worker as an independent contractor; rather, the worker must be actively exercising this right to meet the standard of independent contractor.
Based on this new factor, the NLRB found that FedEx delivery drivers in the company’s Connecticut terminal were employees and not independent contractors as the company claimed.
These are the 11 factors that the NLRB now uses to determine employment status (citing Restatement (Second) of Agency, § 2 (1958)):
Employers face stiff financial penalties for misclassification of workers, including fines, interest and penalties. If the misclassification is found to be willful, the IRS can assess harsher penalties.
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