Set Builders Under The Independent Contractor Law
Juan, Mark and Jim were employed as set builders for a company that provided theatre- based entertainment in Massachusetts. They were responsible for the construction of the sets used in the business, under the supervision and direction of management.
For many years, they were classified as independent contractors, not employees. This meant they were not paid overtime, and the company did not pay into unemployment on their behalf. It also meant they were responsible for the self-employment tax on their income (7.5% of gross income). The company suddenly changed their classification, after an investigation by the Massachusetts Attorney General based on another worker's complaint. Within a month of re-classifying them as employees, they were fired. This left the three of them without a job, unpaid for significant overtime they had worked before the change in classification, and unable to collect unemployment because they had not been W2 employees long enough to be eligible for benefits. Independent Contractor Law SolutionJuan, Mark and Jim were pretty clearly employees under the Massachusetts Independent Contractor Law. The employer had more or less acknowledged this, by re-classifying them after the Attorney General investigated.
The employer, however, was unwilling to compensate them for the harm they had suffered by being paid as 1099 workers for several years, or for their termination immediately on the heels of the correction of that error. After resisting litigation based on an arbitration provision in their independent contractor agreements, the employer finally agreed to a settlement that compensated them for these damages. PostscriptOur clients were ultimately made whole for the damage they had suffered, but not until after a protracted legal battle, complicated by the fact that they had signed agreements to arbitrate disputes with their employer.
If you are in a similar situation, it pays to get legal advice as soon as you have questions about your employment classification. It is also a good idea usually to request a copy of your personnel file, so that you will know ahead of time if there are surprises in there like an agreement to arbitrate. |
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