Definition of Independent Contractor
Many states, including Massachusetts, use the “ABC Test” to separate independent contractors from employees. The following three criteria are necessary to qualify for independent contractor status:
- Part A of the Massachusetts law on independent contractor status requires the individual to be “free from direction and control” of the employer; in other words, completing work independently of the employer’s oversight.
- Part B says that independent contractor services “must be performed outside the usual course of business of the employer,” meaning there is no specific location or hours in which the employee should work.
- Part C requires that the contractor “be customarily engaged in an independently established trade, occupation, profession, or business of the same nature as the service performed,” meaning that independent contractors should also be providing the same services to other clients.
In simpler terms from the IRS website: “The general rule is that an individual is an independent contractor if the payer has the right to control or direct only the result of the work and not what will be done or how it will be done.”
Why Employee Classification Matters – Workers Compensation
When an employer has wrongly labeled workers as independent contractors to avoid obligations (such as providing workers’ compensation), this classification can become a central component of any claim against an employer.
Massachusetts Class Action Case
A recent class action case against Massachusetts-based logistics company Spirit Delivery & Distribution Services, Inc. was settled in the plaintiffs’ favor in March 2017. Delivery drivers for Spirit alleged that the company had incorrectly classified them as independent contractors, which deprived them of employee rights and benefits. Using the ABC determination above, the drivers argued that the work they performed was in the normal line of business for Spirit, which specialized in the home delivery of appliances, furniture, and electronics. The court found that the classification of these drivers as independent contractors was in violation of the Massachusetts Independent Contractor Law. Vargas v. Spirit Delivery & Distribution Services, Inc., No. 13-cv-12635-TSH (D. Mass. Mar. 24, 2017).
Contact a Workers Compensation Attorney
If you are currently classified as an Independent Contractor by your employer, but the above ABC test doesn’t apply to your employment situation, you may wish to seek the advice of an experienced workers’ compensation attorney to determine if your employer is obligated to provide you with the legal benefits owed to full-time employees. Independent Contractor status should come under scrutiny especially in cases of worker injury, to determine if your employer is responsible for providing worker’s compensation.
If you were injured while working as an Independent Contractor, and unsure about which workers’ compensation laws apply, our experienced attorneys can help. Contact us to talk about your case and to learn more about your options.