NY Department of Labor Audit and Misclassification of Worker Lawyer Blog Series
Our Award Winning Employment Law Attorney is often asked about the proper classification of workers and prior blogs have discussed this topic in general. Today’s blog post will discuss the status of tour guides and whether a worker should be treated as an employee or a contractor. Each case is unique and these cases are very fact specific so you are urged to consult an employment law attorney regarding your particular circumstances. In New York, there are many companies who use tour guides as part of escorted journeys as part of their business model (on a bike, bus or by walking) or for discrete special events. If a Company makes an error in classifying its workers and treated them as contractors instead of as employees, the unintended consequences can be tremendous. For example, companies may be subject to claims by the workers for overtime pay, employee benefits, employee compensation and claims for inappropriate tax treatment. Furthermore, the company may face fines and penalties from state and federal governmental agencies. This is an area where the government agencies are increasing their enforcement efforts so it is important for companies to understand their compliance obligations proactively before an Department of Labor (“DOL”) audit or other action is commenced.
The DOL has stated that the following are strong indicators (but not dispositive) that a tour guide is a contractor:
- The tour guide can select or alter the itinerary and/or route without prior approval of the tour operator.
- The tour guide sets or negotiates the rate of pay received from the tour operator. This is one of the hallmarks of a contractor relationship.
- The tour guide is not required to maintain a log or submit reports. Conversely, employees are generally required to provide regular reports.
- The tour guide is not subject to a non-competition agreement and is not restricted from setting up a private unscheduled side excursion/tour/event with customers without prior approval of the tour operator. The tour guide handles arrangements and collection of money for side trips.
- The tour guide is free to accept or reject an assignment.
- The tour guide is free to accept assignments from other tour operators.
- The tour guide provides his or her own maps, videos, journals, and periodicals and does not use the Company’s equipment or tools.
- The tour operator may require a neat appearance but does not dictate attire or uniform.
- The tour guide has his or her own private business cards and is allowed to give them to the tour operator’s clients for his or her own benefit.
The DOL has stated that the following are strong indicators (but not dispositive) that a tour guide is an employee:
- The tour guide is prohibited from accepting assignments from other tour operators. A written non-compete may or may not be present. This prohibition could exist in a signed agreement, offer letter or in a company policy.
- The tour guide is paid at a rate established by the tour operator. A hourly rate may be indicative of an employee relationship.
- The tour guide must accept an assignment from the tour operator and cannot assign the work to someone else. This goes to show the level of direction in an employment relationship.
- The tour guide is required to follow a point-to-point itinerary established by the tour operator, or must obtain approval for any variation from an established itinerary.
- The tour guide is provided with employee benefits such as paid sick leave, vacation, and health insurance. This seems obvious but it does come up from time to time.
- The tour guide is required to submit written logs, reports, or check in at regularly established intervals.
- The tour guide is required to wear a uniform or other standardized attire.
- The tour guide is prohibited from forming private side excursions/tours/events without approval of the tour guide operator.
- The tour operator provides maps, videos, journals, or periodicals to the tour guide for his or her own use.
These are just some of the factors and the above lists are not meant to be exhaustive. No one factor alone is dispositive – it is a totality of the circumstances analysis. Each list is to be used generally – you should consult a lawyer for specific advice. Feel free to contact our office at (800) 893-9645 to discuss your specific situation and learn your rights and options.
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Disclaimer: Thank you for visiting our Blog. This blog provides general information and thoughts about various employment law issues primarily in the New York Tri-State area and occasionally in other areas. You are welcome to read the posts. However, do not construe any content on this blog as legal advice or the creation of an attorney-client relationship. Again, we provide the content only for informational purposes. You should not make decisions based information on our blog since the application of the law depends on the facts and each situation may be different. In addition, the law in most jurisdictions is different and changes constantly and we make no representations that any information on our blog has been updated. The Blog should not be used as a substitute for competent legal advice from an experienced attorney in your state or jurisdiction. From time to time, a blog post may discuss a legal case – please note that the post may not contain the most to update information on the case as developments may have occurred after it was created.