Supplemental materials for LEAP 2025 session Avoiding Costly Misclassification Mistakes: Employee vs. Independent Contractor
One benefit of engaging independent contractors to perform work is that contractors don’t count as employees for purposes of complying with laws such as Title VII of the Civil Rights Act. But, just calling someone an independent contractor doesn’t necessarily mean she is one. She might really be an employee.
Recent case: Melanie worked for a health-care service that operated out of the married owners’ home. She complained to the wife that the husband created a sexually hostile work environment by watching pornography during her office shifts. After her third complaint, Melanie was fired. She sued, alleging sexual harassment.
The owners asked the court to toss out the case because they didn’t have 15 employees—the minimum required for Title VII to apply. They claimed all 50 of their staff members were independent contractors, so they weren’t covered.
The 5th Circuit rejected their claim after analyzing whether the workers were employees or contractors. Factors the court considered were that the owners could hire and fire the workers and set their work schedules. They controlled the details of the work was to be performed. The workers underwent orientation and had to pass a test on company policies. They received annual reviews. The workers signed contracts acknowledging that they were independent contractors, but the court said that was irrelevant.
It declared them employees, putting the company over the 15-employee count required to comply with Title VII. (Mason, et al., v. Helping Our Seniors, WD TX, 2023)
Interested in joining HR Employment Law Advisor? For a limited time, LEAP 2025 attendees can get an annual membership at 30% off at https://www.hremploymentlawadvisor.com/leap30.
