Federal Court Holds Company Misclassified Franchisees As Independent Contractors

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As we have previously reported, Massachusetts wage and hour laws strongly disfavor the classification of individuals as independent contractors rather than employees. Massachusetts General Laws chapter 149, § 148B presumes that workers are employees, unless the alleged employer satisfies a strict, three-pronged test: (1) the individual is free from control and direction in connection with the performance of a service; (2) the individual performs a service that is outside the usual course of the employer’s business; and (3) the individual is customarily engaged in an independently established trade or profession. A recent decision by the U.S. District Court for the District of Massachusetts is a reminder that Massachusetts courts will scrutinize the classification of individuals as independent contractors. In Awuah v. Coverall North America, Inc., the federal court held that a group of franchisees were misclassified as independent contractors under Massachusetts law.

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