An Independent Contractor Agreement Does Not Guarantee That The Individual Is In Fact An Independent Contractor
It is by now axiomatic that an independent contractor agreement, however well-crafted, cannot guarantee that an individual will not be classified as an employee. This fact is brought home by the recent California case of Sawin v. McClatchy Co., Case No. 34-2009-33950 (Cal. Super. Ct. Sacramento Co. Sept. 22, 2014).
The plaintiffs in this case worked as carriers for a newspaper. On one hand, they signed agreements with the newspaper stating that they were independent contractors, which many of them renewed annually year after year; they could pick up papers at any time at the newspaper’s warehouses and set their own schedules (so long as the papers were delivered by a particular time determined by the company); they could hire their own helpers and substitutes, purchase their own supplies, and wear their own clothes; and they provided their own vehicles and insurance.
On the other hand, no specialized education, skills, tools, and equipment were required to perform their jobs; the carriers never represented themselves as operating independent delivery services (for which the newspaper was just one of their customers); the employer owned the delivery routes and customer lists; trained the carriers on the performance of their duties; deducted insurance premiums from the carriers’ compensation; audited the carriers’ job performance; and when the employer received complaints about a delivery, it deducted penalties from the carriers’ compensation.
The court observed that under California law (as in New York), whether a worker is an employee or independent contractor depends upon whether the hiring entity retains “the right to control” the manner and means of the workers’ performance of their duties. In making this determination, the court instructively observed that courts may consider the following traditional “right to control” factors:
- whether the work is part of the hiring entity’s regular business;
- whether the worker provides his or her own tools and equipment;
- whether the worker maintains his or her own business;
- degree of skill required for the work;
- length of time of the job;
- method of payment; and
- whether the parties believed that they were creating an employment relationship.
Applying these factors, the court concluded that the carriers were properly classified as employees of the newspaper rather than independent contractors.