This article was originally published in Law360.
On Dec. 13, 2021, Massachusetts' highest court held that the multifactor standard of the Fair Labor Standards Act, and not the Massachusetts independent contractor law's so-called ABC test, determines joint employer status under state law.
This decision brings welcome relief for businesses that now have meaningful guidance for structuring their relationships with contractors, service providers and vendors, and limiting their exposure to employment laws in Massachusetts.
Background
In Jinks v. Credico USA LLC,[1] Credico, a client broker for independent direct marketing companies, contracted with DFW Consultants Inc. to provide sales and marketing services, including door-to-door and face-to-face sales services, for Credico's nationwide clients.
DFW in turn hired the plaintiffs as salespeople. DFW classified the plaintiffs as independent contractors, without any input from Credico.
The plaintiffs sought to hold Credico liable under a joint employer theory for their alleged misclassification and violations of Massachusetts wage and hour laws, including failure to pay minimum wage and overtime.[2]
The Supreme Judicial Court Adopts the FLSA Test
The Massachusetts Supreme Judicial Court held that:
Massachusetts wage and hour laws "include the concept of joint employment"; and
The standard for determining joint employer status is the multifactor, "totality of the circumstances" test applied under the FLSA.
First, the court...
International Business Machines Corp. (IBM) will pay more than $17 million to settle allegations it violated federal anti-discrimination rules tied to government contracts, the U.S. Department of ...