Have You Been Misclassified as an Independent Contractor? The ABC Test

Time and time again, businesses misclassify employees as independent contractors. It is always important to scrutinize the relationship to ensure you are not missing out on monetary damages, worker’s compensation coverage, payroll tax contributions and overtime wages.

In this appeal to the Massachusetts’s Appeals Court for unemployment compensation, the court affirmed the district court’s decision that the plaintiff was an employee who performed services for the company in question.

The burden rests on the ‘employing unit’ to overcome the statutory presumption and to establish that [the plaintiff], the individual who performed services for it, falls within the statutory exemption.” The court relies on what is known as the tripartite “ABC” test. “Under this test, the employing unit must prove that plaintiff performed services:

(a) ‘free from control or direction’ of the employing enterprise;

(b) ‘outside of the usual course of business,’ or ‘outside of all the places of business, of the enterprise;’ and

(c) as part of ‘an independently established trade, occupation, profession, or business” of the worker.’

G. L.  c. 151A, § 2.

The plaintiff had several contractual obligations with the defendant company including; following designated delivery routes, wearing a t-shirt bearing the defendant’s logo, and ensuring that anyone working with the plaintiff met the defendant’s requirements. The defendant also had control over the maintenance of the plaintiff’s delivery vehicle and whom he allowed inside the vehicle. The court held that the defendant “did not meet its burden of showing that [the plaintiff] was free from control, direction, and supervision of the employing enterprise.”

The plaintiff also worked exclusively for the defendant five days a week between 9 P.M. and 6 A.M and the defendant required approval before plaintiff could perform work for any other clients. The court notes this relationship “thus plac[es] limits on his ability to work for anyone wishing to avail themselves of his services.” Here the court held that the defendant did not meet its burden with respect to the third part of the ‘ABC’ test.

The relationship between the employing unit and the worker is paramount in determining many of the worker’s rights. In most cases the label as independent contractor is for the benefit of the hiring company and to the detriment of the worker. The court concludes with, “the fact that [the plaintiff] signed an agreement that identified him as an independent contractor is not determinative.” If you believe you are a worker incorrectly labeled as an independent contractor seek legal advice to ensure you are being afforded all of your rights.




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