What is an employee? The answer depends on the Federal law

Monthly Labor Review

Volumn 125, Issue 1, 2002, Pages 3-11

  Muhl, Charles J ^a  

^a Goldberg Kohn Bell Black R   (United States)

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EID: 11244313992     PISSN: 00981818     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Article

References (36)

1. The figures reported are for the broadest of the Bureau's three measurements of the contingent workforce. For additional information, see the BLS news release, "Contingent and Alternative Work Arrangements," February 2001.
2. By the criteria of the survey, a worker may be in both a contingent and an alternative work arrangement, but is not automatically so, because contingent work is defined separately from alternative work arrangements.
3. American Heritage Dictionary of the English Language, 1978.
4. Henry Campbell Black, Black's Law Dictionary (St. Paul, MN, West Publishing Co, 1991), p. 363.
5. Ibid., p. 530.
6. See, for example, Mark Diana and Robin H. Rome, "Beyond Traditional Employment: The Contingent Workforce," 196 APR N.J. Law 8, *9 (April 1999).
7. 26 U.S.C. 3101 et seq.
8. 26 U.S.C. 3301 et seq.
9. 26 U.S.C. 3401 et seq.
10. In many cases, an independent contractor's true employer is the contracting agency, which would be subject to these Federal laws. In addition to the Federal laws that protect employees, additional State laws, including those which provide workers' compensation benefits, typically protect employees, but not independent contractors.
11. 29 U.S.C. 201 et seq.
12. 42 U.S.C. 2000(e) et seq.
13. 29 U.S.C. 621 et seq.
14. 29 U.S.C. 1001 et seq.
15. 42 U.S.C. 12101 et seq.
16. 29 U.S.C. 2601 et seq.
17. 29 U.S.C. 151 et seq.
18. Federal law provides employers with a safe-harbor provision to avoid a retroactive IRS reclassification of workers as employees where an employer had a "reasonable basis¿ for treating a worker as an independent contractor. An employer's good faith in making the determination is required for the safe harbor to apply.
19. The case has an extensive procedural history throughout the 1990s. For the opinion of the Ninth Circuit Court of Appeals regarding the status of the Microsoft workers focused on in this article, see 120 F.3d 1006.
20. The IRS used its "20-factor test" in making its determination regarding the employees' status. (For details of the test, see next section in the text.)
21. The District Court used the "common-law test" in making its determination regarding the employees' status. (For details of the test, see next section in the text.)
22. 490 U.S. 730 (1989).
23. Black's Law Dictionary, p. 62.
24. See IRS Revenue Ruling 87-41; see also "Summary of IRS 20-Factor Test," from HRnext.com, on the Internet at http://www.hrnext.com/ tools/view.cfm?articles_id=1470&tools_id=2.
25. 112 S.Ct. 1344, 1348-49 (1992).
26. 137 F.2d 531 (2nd Circuit 1943).
27. 550 F.2d 566 (9th Cir. 1977).
28. The Fair Labor Standards Act uses the following uninformative definition of "employee" in the statutory language: "any individual employed by an employer." However, Congress and the courts have recognized that, because of its primary focus on protecting workers, the definition of "employee" under the Act is the broadest one used pursuant to the economic realities test.
29. See Myra H. Barron, "Who's an Independent Contractor? Who's an Employee?" 14 Lab. Law 457, 460 (winter/spring 1999).
30. 757 F.2d 1376 (3rd Cir. 1985).
31. 840 F.2d 1054 (2nd Cir. 1988).
32. 814 F.2d 1042 (5th Cir. 1987).
33. 847 F.2d 270 (9th Cir. 1988).
34. For additional discussions of the classification of workers as employees or independent contractors and the ramifications for employers, see John C. Fox, Is That Worker an Independent Contractor or Your Employee? (Palo Alto, CA, Fenwick and West, March 1997); Barron, "Who's an Independent Contractor?" Diana and Rome, Beyond Traditional Employment; and William D. Frumkin and Elliot D. Bernak, "Cost Savings from Hiring Contingent Workers May Be Lost if Their Status Is Challenged," New York State Bar Journal, special edition on labor and employment law, New York State Bar Association, September-October 1999.
35. For additional discussions of the classification of workers as employees or independent contractors and the ramifications for employers, see John C. Fox, Is That Worker an Independent Contractor or Your Employee? (Palo Alto, CA, Fenwick and West, March 1997); Barron, "Who's an Independent Contractor?" Diana and Rome, Beyond Traditional Employment; and William D. Frumkin and Elliot D. Bernak, "Cost Savings from Hiring Contingent Workers May Be Lost if Their Status Is Challenged," New York State Bar Journal, special edition on labor and employment law, New York State Bar Association, September-October 1999.
36. For additional discussions of the classification of workers as employees or independent contractors and the ramifications for employers, see John C. Fox, Is That Worker an Independent Contractor or Your Employee? (Palo Alto, CA, Fenwick and West, March 1997); Barron, "Who's an Independent Contractor?" Diana and Rome, Beyond Traditional Employment; and William D. Frumkin and Elliot D. Bernak, "Cost Savings from Hiring Contingent Workers May Be Lost if Their Status Is Challenged," New York State Bar Journal, special edition on labor and employment law, New York State Bar Association, September-October 1999.