The National Labor Relations Board (NLRB) recently created a new test to determine whether a worker is an independent contractor or an employee. This test was created to help businesses and workers better understand their classification and rights under the National Labor Relations Act (NLRA). In this article, we will explain the NLRB independent contractor test, and what it means for businesses and workers.
What is an independent contractor?
An independent contractor is a worker who provides services to a business, but is not an employee. Independent contractors are self-employed and typically are responsible for their own taxes, insurance, and other expenses related to their work. Independent contractors are not eligible for employee benefits, such as health insurance or retirement plans, but they also have more flexibility in their work arrangements.
What is the new NLRB independent contractor test?
The NLRB`s new independent contractor test is a two-part test that examines the worker`s degree of control over their work and their economic dependence on the business. The first part of the test looks at the worker`s control over their work, including factors such as:
– The degree of control the worker has over the work they perform
– The skill required to perform the work
– The degree of supervision the worker receives
– The location of the work
– The duration of the relationship between the worker and the business
– Whether the worker has the right to work for other businesses
The second part of the test looks at the worker`s economic dependence on the business, including factors such as:
– The worker`s investment in their own equipment or materials
– Whether the worker has the ability to realize a profit or loss
– The degree of control the worker has over their earnings
– Whether the work performed is an integral part of the business`s operations
– Whether the worker has an opportunity to make a profit through their skills or business acumen
Why is the new NLRB independent contractor test important?
The new NLRB independent contractor test is important because it clarifies the criteria for determining whether a worker is an independent contractor or an employee under the NLRA. This determination is important because it determines the worker`s rights and benefits under the NLRA, including the right to unionize and engage in collective bargaining. Additionally, misclassification of workers can lead to legal and financial consequences for businesses.
Businesses should review their worker classifications in light of the new NLRB independent contractor test to ensure that they are complying with the NLRA. Workers who believe they have been misclassified should consult with an attorney who specializes in labor and employment law to determine their rights and options.
In conclusion, the NLRB`s new independent contractor test is an important development in labor and employment law. This test provides clarity for businesses and workers, and helps to protect worker rights and benefits under the NLRA. Businesses should review their worker classifications in light of the new test, and workers who believe they have been misclassified should seek legal advice.
