In 2004, Massachusetts changed its independent contractor law in a rather radical way. The amendment essentially banned the use of independent contractors in the Commonwealth, regardless whether workers and employers agreed that the arrangement made good business sense. The new law so narrowly defined who could and couldn’t be an independent contractor that most observers figured it represented a case of legislative over-drafting. How, after all, could the state have intended such a radical result when important segments of the business community had for so many years operated openly and productively under the independent contractor model?
Five years later, the anti-contractor law not only is unchanged but is being vigorously enforced under the leadership of Governor Deval Patrick. In 2008, he formed a joint task force to target violators of the independent contractor statute, calling them purveyors of an “underground economy” that underpays employees, reduces state tax revenues, and undermines safety laws. The task force’s mission statement takes an aggressive stand against what’s termed improper employee classification, which the Governor believes affects one in every seven Massachusetts workers. In its one year of existence, the task force has already launched hundreds of coordinated investigations and leveled numerous fines against Massachusetts employers. An anonymous tip line makes starting an inquiry easy, and the power of member agencies like the Department of Revenue, Labor Department, and the Division of Unemployment Assistance do the rest.
Employers of all types and sizes should take notice. If you use independent contractors, review the law along with your policy to determine whether changes are needed. Massachusetts now imposes a tough, three-part test that must be met when independent contractors are used. The burden is on an employer to prove the following:
- that a worker is free from employer control;
- that he or she performs work outside of the company’s usual course of business; and
- that the contractor customarily works in an independent business.
The second of these requirements is particularly difficult since, read literally, it says a company that, for example, provides appraisal services cannot hire appraisers on an independent basis. In written guidance on the law, the state’s attorney general makes this point clearly. Given the stakes of the game at this point, employers must take notice. Call your attorney for more information. The task force also has a web page that provides general information to the public.
Attorney Jack Merrill is a Boston, MA employment lawyer providing legal services to employees, employers and businesses throughout the Boston metro west and Worcester County region including Ashland, Dedham, Framingham, Franklin, Hopkinton, Maynard, Marlborough, Milford, Natick, Needham, Newton, Shrewsbury, Sudbury, Waltham, and Worcester, Massachusetts
