The National Labor Relations Act guarantees private-sector employees the right to organize, form unions, and bargain collectively with their employers. In 1947, Congress amended the NLRA to expressly exclude independent contractors from the Act’s definition of employee.
In NLRB v. United Insurance Company of America, the US Supreme Court stressed that “there is no shorthand formula or magic phrase that can be applied to find the answer” to whether someone is an employee or independent contractor. Rather, “all of the incidents of the relationship must be assessed and weighed with no one factor being decisive.” Following United Insurance, the United States Court of Appeals for the District of Columbia Circuit and the National Labor Relations Board—the agency charged with enforcing the NLRA—have applied a non-exhaustive, ten-factor test utilizing common-law agency principles to determine whether a worker is properly classified as an employee or independent contractor: (1) the extent of control the employer has over the work; (2) whether the worker is engaged in a distinct occupation or business; (3) whether the kind of occupation is usually done under the direction of the employer or by a specialist without supervision; (4) what level of skill is required in the particular occupation; (5) whether the employer or worker supplies the instrumentalities, tools, and the place of work; (6) length of employment; (7) whether the employer pays by the time or by the job; (8) whether the work is part of the employer’s regular business; (9) whether the employer and worker believe they are creating an employer-employee relationship; and (10) whether the hiring party is in business. Continue reading