This subject is covered in four parts. The first article provides an introduction and focuses on the classification for the purposes compliance with the Federal Labor Standards Act (FLSA) enforced by the U.S. Department of Labor (DOL). The second article focuses on the classification under the Internal Revenue Service (IRS). The third article covers the criteria used under Florida common law, and the fourth article addresses the criteria under the Florida Workers’ Compensation Statute.[1]
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In Florida, the classification of whether a worker is an employee or an independent contractor for the purposes unemployment benefits or “Reemployment Assistance”
Is based on factors laid out by common law, as dictated by Chapter 443 F.S.[2] These factors are weighed in the context of the industry, work relationship, the type of work performed, and other circumstances.
Similar to the Internal Revenue Service (IRS) factors discussed in Part 2 of this series, Florida common law factors weigh the level of control the employer exercises over the worker. This analysis is different from the “economic realities” standard under the Federal Labor Standards Act (FLSA) discussed in Part 1 of this series, which evaluates the level of economic dependency of the worker on the employer. The Florida common law factors are separate from those laid out under the Florida Worker’s Compensation Statute, discussed in Part 4 of this series, which provides a broader definition of employee.
Common Law Factors
The common law factors, set in the case of Cantor v. Cochran, 184 So. 2d 173 (Fla. 1966), are applied to date when determining whether a worker is an employee or an independent contractor:
- The extent of control which, by the agreement, the business may exercise over the details of the work;
- Whether or not the one employed is engaged in a distinct occupation or business;
- The kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the employer or by a specialist without supervision;
- The skill required in the particular occupation;
- Whether the employer or the worker supplies the instrumentalities, tools, and the place of work for the person doing the work;
- The length of time for which the person is employed;
- The method of payment, whether by the time or by the job;
- Whether or not the work is a part of the regular business of the employer;
- Whether or not the parties believe they are creating the relation of [employer-employee]; and
- Whether the principal is or is not in business.
Unemployment Benefits Disputes
Worker classification disputes often arise when workers are discharged and then file for unemployment benefits. One of the most recent Florida cases addressing classification in this scenario involves drivers of the transportation company Uber. When Uber revoked two of its drivers’ access to the Uber app (the technology drivers use to provide transportation services), the drivers filed for unemployment benefits (“Reemployment Assistance”). The Florida Department of Revenue (DOR) classified them as employees entitled to benefits, but Uber appealed.
In a final order issued in December of 2015, the Florida Department of Economic Opportunity (DEO) classified Uber drivers as independent contractors. The final order stated, in part:
“Uber is no more an employer to drivers than is an art gallery to artists. … Uber is a technology platform that, for a fee, connects transportation providers with customers seeking transportation. The agreement between drivers and Uber specifies that the relationship is one of independent contractor, and the actual course of dealing confirms that characterization. Drivers have significant control over the details of their work. Drivers use their own vehicles and choose when, if ever, to provide services through Uber’s software. Drivers decide where to work. Drivers decide which customers to serve. Drivers have control over many details of the customer experience. Drivers may provide services through, or work for, competing platforms or other companies when not using the Uber application. On these facts, it appears that Uber operates not as an employer, but as a middleman or broker for transportation services.”
This order has been appealed. At the time of this writing, it is uncertain whether Uber will prevail in the administrative action, or whether courts in Florida will agree with it. Interestingly, California and Oregon have recently reached an opposite conclusion, finding that drivers using the Uber software are employees under the California and Oregon laws.
The classification of independent contractor vs. employee is also important when determining whether a worker is entitled to minimum wage and overtime pay. For overtime and exemption policies, Florida follows the Fair Labor Standards Act (FLSA).[3]
Best Practices
It is in the employer’s best interest to engage the assistance of an attorney to identify potential vulnerabilities in the classification of its workers. Workers seeking to protect their employee benefits can consult with an attorney to better understand their rights and responsibilities in a work relationship, particularly when asked to become independent contractors in a situation where they believe they should be employees. Small businesses, including professionals and contractors, should also be aware of their responsibilities as independent contractors in order to minimize their liability exposure.
Whether you are an employer, employee, or independent contractor, the Orlando employment law attorneys of Burruezo & Burruezo can assist you in assessing an independent contractor vs. employee situation and offer competent legal representation, if necessary. Click here to contact an attorney now.
[1] See Independent Contractor or Employee? (Parts 1, 2 and 4) blog articles for more information.
[2] See Unemployment Benefits blog article for more information.
[3] See Independent Contractor or Employee? (Part 1) and Wage and Overtime blog articles for additional information.