NLRB Modifies the Independent Contractor Standard
In its new decision regarding The Atlantic Opera, Inc., the National Labor Relations Board (NLRB) has overturned its 2019 SuperShuttle decision, which set a standard for determining independent contractor status under the National Labor Relations Act. By overturning SuperShuttle, the NLRB returns to the standard set by FedEx Home Delivery II in 2014. Notably, entrepreneurial opportunity for gain or loss will no longer be the “animating principle” of the NLRB’s independent contractor test.
When determining independent contractor status, a non-exhaustive list of common law factors are considered. These factors include, but are not limited to:
- the level of control the employer may exercise over the details of the work
- whether the work is done in an occupation that usually takes place under the direction of the employer or a specialist without supervision;
- the length of time the individual is employed; and
- the method of payment, whether by time or by the job.
Under the FedEx II standard, the non-exhaustive common law factors are considered in addition to asking whether the putative independent contractor is rending services as part of an independent business. The individual’s entrepreneurial opportunity for gain or loss is a facet of the independent business factor. Under SuperShuttle, the worker’s entrepreneurial opportunity was considered an animating principle of the independent contractor test, a stance that the NLRB has now rejected as contrary to common law and court precedent.
Under the new decision, entrepreneurial opportunity should be considered, along with the non-exhaustive common law factors, by analyzing whether the evidence tends to show that the individual actually provides services as part of an independent business.