Not every work relationship in Massachusetts is an employee-employer relationship. Sometimes an employer chooses to work with independent contractors, rather than hire employees. Depending on the circumstances, working with an independent contractor can be less costly than hiring an employee, and independent contractors may have specialized knowledge and abilities that general employees of the business do not have.
However, it is important that workers are properly classified as either independent contractors or employees. This is because employers must follow wage and hour laws that are applicable to employees, such as minimum wage and overtime laws, that are not applicable to independent contractors.
There is a three-prong test to determine whether a worker is an independent contractor. To be an independent contractor, the employer cannot control or direct how the work is completed, the work must not be performed as part of the usual course of the employer's business and the work must be completed by a person who has their own independent business in that specific field.
If these three prongs are met, a Massachusetts employer can consider the worker at issue to be an independent contractor. However, care must be taken when applying these laws to the facts of your specific case. That is because a misclassification of an employee as an independent contractor could lead to civil sanctions against the employer, and the worker may even file a formal wage complaint. This could be very costly to the employer.
Thus, employers should make sure that any workers classified as independent contractors meet the legal requirements for such a classification, rather than being classified as employees. Attorneys familiar with employment law for employers can be a good resource in such situations.