The National Labor Relations Board has returned to its traditional multi-factor test for determining independent contractor status, overruling its own 2019 decision that had focused mainly on the worker’s entrepreneurial opportunity (The Atlanta Opera, Inc., NLRB, June 2023). This test is important to properly classify workers because independent contractors are excluded from the organizing rights and concerted activity protections of the National Labor Relations Act (NLRA).
The Board now determines worker classification using a version of the “common law test” which analyzes an employer’s right to control a worker’s performance of work against the worker’s actual entrepreneurial opportunity in performing it. The test contains multiple factors, including:
- Your right to control how, where, or when the worker performs the work;
- Your degree of supervision over the worker;
- Whether you provide tools, equipment, or facilities to perform the work;
- The duration of the relationship;
- The method of payment;
- Whether the work is a regular part of your business; and
- How you and the worker have characterized the relationship.
When these factors are considered together, if they weigh more toward your right to control the worker’s performance, the worker is an employee. If the factors weigh more toward the worker using their own entrepreneurial skills for gain or loss, the worker is an independent contractor. No single factor is given greater weight or is alone enough to determine a worker’s classification.
Tips: The Board’s new test makes it more likely that a worker will be considered an employee under the NLRA. The process of determining whether someone is an employee or an independent contractor is complex and must be analyzed using different factors under both federal and state laws. Classification is highly fact-specific and getting it wrong can have significant and costly results. For more information, see our Legal Guide, Independent Contractor or Employee? and contact your Vigilant Law Group employment attorney with questions.
