My company has reclassified a couple of people that I always thought of as employees as "independent contractor. I think they are doing this to limit their payroll or other taxes. Can you tell me if there is any guidelines out there about MA employment law on this issue and how to determine if someone is an employee or an independent contractor? I'm curious if I might be the next on to be reclassified. Thanks.
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Editor's Response
Sure. The law in question is Massachusetts General Laws Chapter 151A, Section 2. In 2008, the Massachusetts Attorney General's Office relieased an Advisory Opinion interpreting Section 2. Section 2 and the Advisory Opinion establish a strict three-part test that makes it fairly difficult for employers to reclassify current employees:
1. " . . . the individual must be free from control and direction in connection with the performance of the service, both under his contract for the performance of service and in fact in order for the individual to be an independent contractor." (Qoutes and citations omitted.)
2. " . . . the service the individual performs must be outside the usual course of business of the employer in order for the individual to not be classified as an employee." (Qoutes and citations omitted.)
3. " . . . the individual is customarily engaged in an independently established trade, occupation, profession or business of the same nature as that involved in the service performed in order for the individual to be classified other than as an employee." (Qoutes and citations omitted.)
Hope that helps.