On May 1, 2008, Attorney General Martha Coakley’s Office issued an Advisory on the Independent Contractor Law, M.G.L. c. 149, § 148B (the “Law”). The Law was amended in 2004, and previous guidance on the 2004 Amendments left employers with more questions than answers. Indeed, under the previous guidance, it was not clear whether an employer could legitimately hire any independent contractors to work in Massachusetts, without treating them as employees. The new Advisory offers important direction regarding how employers may properly classify individuals as independent contractors.
The Law sets forth a three-pronged test, and employers have the burden of proving the requirements of all three prongs are met in order to classify individuals as independent
contractors, rather than employees. Under this test, an individual performing any service must be considered an employee unless:
. the individual is free from the employer’s direction and control in connection with the performance of the service, both under his or her contract for the performance of service and in fact;
. the service the individual performs is outside the usual course of business of the employer; and
. 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.
Before the 2004 amendment to the Law, employers could satisfy the second prong of the three-pronged test if either the type of work was performed outside of the employer’s ordinary course of business, or if the work was performed outside of the employer’s facilities. After the amendments, the second option was deleted altogether, and employers’ ability to classify workers as independent contractors was severely restricted. (See article for more information).
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