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New York Department of Labor Finds Technician Engineer Was Misclassified as Independent Contractor

Employee.Freelancer.DOL.Misclassification.Lawyer.Notepad.DPC.3.10.16.jpgOur NY Employment Law Defense Attorney represents businesses and misclassified workers and has been asked to discuss a recent involving misclassification of workers. A former telecom field technician also called a field engineer (“Technician”) of Endeavor (the “Company”) filed for unemployment insurance benefits after he stopped working for the Company. The Company disputed his claim by arguing he was an independent contractor and therefore ineligible for benefits. The Technician was initially approved for benefits and the Company requested a hearing. After a hearing, an Administrative Law Judge agreed with the Company and denied the Technician’s benefit claim. The Technician filed an appeal to the Appeal Board and that decision is generally discussed herein.

The Appeal Board Decision

The Company worked with telecommunication companies to provide installation and repairs to end users. The Company used field technicians to provide its services. The manner in which the Company recruited and treated the technicians was the focus of the inquiry and whether that was consistent with an employee or contractor relationship.

In this case, the technician at issue, (i) completed an application, (ii) underwent a criminal background check, (iii) upon being selected, was issued a photo identification badge with the Company’s name, and (iv) was given an unique username and password to access the Company’s documents including training materials called “Access Instructions for Field Engineers”, “Guidelines for your Installations” and “Online Invoicing.” The Company provided some training to the technicians. In addition to Independent Contractor Agreements that the Company asked technicians to sign, the Company also provided other documents such as guidelines for professionalism when interacting with clients while working.

The Appeal Board stated that the determination of a worker’s status is a factual question that should be decided based on the evidence of the Company’s control over the results produced by the worker and more importantly, the means to achieve those results.

Here, the Appeal Board found that the technician was an employee and not a contractor because of, in part, the amount of supervision, direction and control that the Company had over the technician’s work. The critical factors were the Company used application for recruiting purposes, conducted background checks and most importantly, provided training and exercised control over how the technician did his or her job. While some factors supported a contractor’s finding (e.g., an independent contractor agreement, the technicians used their own trucks (without any Company’s markings) and tools), the balancing test weighed in favor of an employee finding.

Best.Practice.Light.Bulb.DOL.Audit.Dollar.Photo.1.18.16.jpgCompanies can learn from this case. They should examine their own practices and policies and how they treated their workers. Here, the technician at issue only worked for the company a short time and look at the number of issues raised in that brief working period. It is important to note that the decision impacted all similarly situated technicians who were misclassified and the Company was responsible for unemployment insurance contributions for them. These cases can have class-wide implications. It is advisable to conduct a self-audit and implement best practices before an audit or lawsuit is commenced so you are not working from a reactive defense position. Contact our office to determine if your practices are in compliance with New York State labor and how to protect your business.

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