Mass-Peculiarities: An Employers Guide to Wage & Hour Law in the Bay State 2022 Edition

© 2022 Seyfarth Shaw LLP Massachusetts Wage & Hour Peculiarities, 2022 ed. | 145 support orders. 852 In Massachusetts, employers that refuse to hire or that terminate, suspend, or discipline employees because they are subject to support orders can be liable for lost wages and benefits, plus an additional $1,000 fine. 853 XII. CLASSIFYINGWORKERS AS INDEPENDENT CONTRACTORS One of the most challenging workplace issues facing Massachusetts businesses is the correct classification of certain workers as independent contractors rather than employees. In the past, the definition of an independent contractor was more flexible, and many companies retained independent contractors for a variety of reasons: to supplement their work force, to provide unique or specialized skills, to complete a defined task or project, or to augment their staffing levels for a short term. The definition of an independent contractor has become stricter, and Massachusetts and federal law specifically regulate and limit the circumstances under which a worker may legally be classified as an independent contractor. 854 The Massachusetts Independent Contractor Statute is one of the most restrictive in the country, sharply limiting who may legitimately be classified as independent contractors. 855 The statute may be triggered whenever an individual provides services to a putative employer. 856 This threshold question is usually satisfied when an individual provides services directly to an entity. However, this can be more complicated when the worker is supplied by a third party. Ordinarily, 852 15 U.S.C. §§ 1674(a), 1677(2); M.G.L. ch. 119A, § 12(f)(2). 853 M.G.L. ch. 119A, § 12(f)(2). 854 See M.G.L. ch. 149, § 148B(a). Depending on the issue at hand, the law determiningwhether an individual may be classified as an independent cont ractor varies. The number of different test s for independent contractor status is evidence of the complexity of this area of law. See Camargo’s Case , 497 Mass. 492, 500 (2018) (ident ifying the different independent contractor classificat ion standards under Massachuset t s wage and hour, unemployment insurance, workers’ compensat ion insurance, and tax withholding laws). For purposes of minimum wage, overt ime pay, t imely payment of wages, and personnel recordkeeping, the more rest rict ive Massachuset t s Independent Cont ractor Statute applies, as discussed in this chapter. M.G.L. ch. 149, § 148B(a). For purposes of the Massachuset t s Unemployment Insurance Statute, a similar but less rest rict ive standard applies. M.G.L. ch. 151A, § 2. For purposes of the Massachuset t sWorkers’ Compensat ion Statute, a twelve-factor test applies to determine independent cont ractor status. See Whitman’s Case , 80 Mass. App. Ct . 348, 353 n.3 (2011). The Massachuset t s Department of Revenue uses the IRS twenty-factor test to decide whether workers are independent cont ractors for state wage withholding purposes. Effect of New Employee Classification Requirements Under M.G.L. ch. 149, § 148B on Withholding of Tax on Wages Under M.G.L. ch. 62B , Department of Revenue TIR 05-11 (2005). The DOL looks to the “economic reality test” in enforcing the FLSA. See Administ rator’s Interpretation,No. 2015-1 (Dep’t of Labor July 15, 2015). The economic reality test has approximately six factors but focuses somewhat heavily on whether the worker is economically dependent on the company or in business for him or herself, alongwith the degree of cont rol that the company has over the worker. See id . Although the conclusions under the various test s may be similar, separate analysis is required to avoid violat ions. 855 See M.G.L. ch. 149, § 148B(a). Notably, the California Supreme Court recent ly adopted the Massachuset t s test regarding independent cont ractor status for California wage and hour law, characterizing the test as “simpler [and] clearer” and explaining that the Massachuset t s test is more consistent with the broad reach of California wage orders. Dynamex Ops. West v. Superior Court , 4 Cal. 5th 903, 950-51 n.20, 956-57 n.23 (2018). 856 See M.G.L. ch. 149, § 148B(a) (explaining that it covers any person providing services); Sebago v. Boston Cab Dispatch, Inc ., 471 Mass. 321, 329 (2015) (explaining that the threshold quest ion is whether the plaint iff provided services to the defendant ); Gallagher v. Cerebral Palsy of Mass. , 92 Mass. App. Ct . 207, 210 (2017). While ordinarily this is a quest ion of fact , a court will also consider a regulatory framework that describes the relat ionship between the part ies. See id. at 210-14 (holding that a personal care at tendant did not provide services to a fiscal intermediary pursuant to MassHealth regulat ions).