Wage and Hour Update Case Notes

• Citation: Vol. 29 No. 6
• Publication year: 2015
• Author: By Lois M. Kosch

Wage and Hour Update Case Notes

By Lois M. Kosch

Lois M. Kosch is a partner at Wilson Turner Kosmo. She specializes in counseling and representing employers in all aspects of employment law and litigation. Ms. Kosch is a former member of the Labor and Employment Law Section's Executive Committee.

DOL Narrows Independent Contractor Classification

On July 15, 2015, the U.S. Department of Labor issued guidance aimed at curbing the misclassification of employees as independent contractors pursuant to the Fair Labor Standards Act (FLSA). Specifically, the DOL defined " independent contractor" narrowly enough for many previously classified as independent contractors to now be classified as employees.

In narrowing the definition of independent contractor, this new guidance focuses on the "economic realities" test, which looks at whether workers are economically dependent on the employer or in business for themselves, rather than the "control test," which focuses on the degree to which a business controls an individual's work.

According to the DOL, employers should look to the following six factors in conducting an economic realities test: (1) the extent to which the work performed is an integral part of the employer's business; (2) the worker's opportunity for profit or loss depending on his/her managerial skill; (3) the extent of the relative investments of the employer and the worker; (4) whether the work performed requires special skills and initiative; (5) the permanency of the relationship; and (6) the degree of control exercised or retained by the employer. The DOL further noted that each factor should be examined and analyzed in relation to one another, and no single factor is determinative. Specifically, the DOL stated the "control" factor should not be given undue weight.

Truck Drivers Determined to Be Employees Where Employer Controlled Manner and Means of Work

Garcia v. Seacon Logix, Inc., 238 Cal. App. 4th 1476 (2015)

In determining whether an individual is an "employee" or an "independent contractor," the primary test is "whether the person to whom service is rendered has the right to control the manner and means of accomplishing the result desired."

In this case, truckers transported cargo for a logistics company from the Port of Long Beach and Port of Los Angeles to warehouses or other facilities. Prior to 2008, these truckers owned their own trucks, and it was undisputed they were correctly classified as independent contractors. But after 2008, the...