Introduction:
As HR professionals, staying abreast of regulatory changes is crucial. The National Labor Relations Board (NLRB) has recently issued a significant decision that impacts the classification of workers as employees or independent contractors. Understanding the new standard is vital, as it reverts to the pre-2019 employee/independent contractor test, potentially leading to more workers being classified as employees. This article delves into the factors that will now determine employment status and advises employers to reevaluate the classification of their workers to comply with the new guidelines.
Reverting to the Pre-2019 Employee/Independent Contractor Test:
The NLRB's recent decision means that employers will now use the previous test to ascertain whether a worker qualifies as an employee or an independent contractor. This test analyzes several factors to determine employment status, providing HR professionals with a clear framework for classification.
(a) the extent of control the employer exercises over the details of the work;
(b) whether or not the one employed is engaged in a distinct occupation or business;
(c) the kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the employer or by a specialist without supervision;
d) the skill required in the particular job;
e) whether the employer or the worker supplies the instrumentalities, tools, and the place of work;
(f) the length of time for which the person is employed;
(g) the method of payment, whether by the time or by the job;
(h) whether the work is a part of the regular business of the employer;
(i) whether the parties believe they are creating the relation of employer and employee; and
(j) whether the principal is or is not in business.
Reevaluating Worker Status:
For employers with workers currently categorized as independent contractors, it's imperative to reassess their status based on the new guidelines. The factors outlined above will help determine if these workers should now be considered employees.
Conclusion:
As the NLRB introduces its new standard for determining employment status, HR professionals must be well-versed in the factors that will now be used to classify workers as employees or independent contractors. By understanding and applying these guidelines, employers can ensure compliance with the revised regulations. Reevaluating worker classification is crucial to avoid any potential legal consequences and maintain a compliant and transparent workforce classification process.
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