Independent Contractor Status and Newspaper Carriers

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1 Independent Contractor Status and Newspaper Carriers Prepared by: Mark Hunt King & Ballow 2008 King & Ballow

2 What is an Employee? An employee is subject to the will and control of the employer not only as to what shall be accomplished but also how it shall be accomplished.

3 What is an independent contractor? One Who is engaged to perform services in accordance with his own methods of operating. remains free from the control and direction of the hiring party with respect to everything except the ultimate result sought to be achieved.

4 Employee vs. Independent Contractor Courts and legislatures have not settled upon universally applicable standard for ascertaining status

5 Certain tests must be satisfied

6 Tests Right-To-Control Test Economic Realities Test Relative Nature of the Work Test

7 Because newspaper carriers tend to work unsupervised and away from company facilities, it s possible to design a distribution system that satisfies the tests for independent contractor status.

8 Contractor disputes are most likely to arise: Tort Law Internal Revenue Code State Unemployment Insurance Law State Workers Compensation Law National Labor Relations Act

9 Tort Law

10 The Right-To-Control Test The extent of control which, by the agreement, the company may exercise over the details of the work. Whether or not the one employed is engaged in a distinct occupation or business. The kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the employer or by a specialist without supervision.

11 The Right-To-Control Test The skill required in the particular occupation. Whether the employer or the workman supplies the instrumentalities, tools and the place of work for the person doing the work. The length of time for which the person is employed. The method of payment, whether by the time or by the job.

12 The Right-To-Control Test Whether or not the work is a part of the regular business of the employer Whether or not the parties believe they are creating the relation of master and servant

13 Internal Revenue Code

14 Direct Seller Exemption Component of the Small Business Job Protection Act (1996) Specifically includes persons who are engaged in the trade or business of the delivering or distribution of newspapers or shopping news Requirements 1) substantially all of the worker s remuneration for the performance of such services must be directly related to sales or output, rather than the time or hours worked 2) services must be performed pursuant to a written contract that states the carrier will not be treated as an employee for federal tax purposes

15 State Unemployment Insurance Law

16 State Workers Compensation Law

17 National Labor Relations Act

18 NLRA gives employees the right to form, join and assist labor organizations, or to refrain from such activities and to bargain collectively with employers. Labor unions are currently seeking to organize newspaper carriers by maintaining that the carriers are employees and not independent contractors.

19 The Bad News September St. Joseph News-Press (Missouri) Carriers are determined to be employees under the NLRA and the Teamsters have the right to organize carriers into a bargaining unit.

20 The Bad News July Courier-Journal (Kentucky)-Group of carriers are found to be employees and constitute an appropriate bargaining unit under the NLRA.

21 The Bad News September Arizona Republic Carriers found to be employees rather than independent contractors. November 2005 the Regional Director re-affirmed his decision that the carriers are employees under the Act.

22 The Good News August 2005 The NLRB reversed the decision in the St. Joseph News Press case and determined that the carriers are not employees under the NLRA.

23 The Good News January 2006 A Regional Director reversed her prior decision and determined that the carriers for the Courier-Journal are independent contractors and not employees under the Act.

24 The Good News May The NLRB reversed the decision of the Regional Director in the Arizona Republic case and found that the carriers are independent contractors and not employees under the Act.

25 Responding to Carrier Needs Without Compromising Independent Contractor Status

26 New Carrier Orientation Writing Memos to Carriers Carrier Meetings Bonuses and Carrier Recognition Fluctuating Gasoline Prices Covering Routes in Emergencies Carrier/Subscriber Contact

27 New Carrier Orientation

28 New Carrier Orientation Terminology Outgoing Contractor Whenever Possible If DM has to do it, you are vulnerable, so emphasize carrier choice

29 Writing Memos to Carriers

30 Writing Memos to Carriers The source of the most damage to a newspaper s IC argument Avoid orders and instructions unless it s a direct reference to the written contract. Suggestions are OK, but use clear suggestion language. When you have to correct unacceptable performance, tie it back to the contract.

31 Carrier Meetings

32 Carrier Meetings Voluntary and informational Benefits of having one or two who won t attend

33 Bonuses and Carrier Recognition

34 Bonuses and Carrier Recognition Can be OK, but there are pitfalls to avoid Carrier recognition should avoid tying the carrier too closely to the newspaper

35 Fluctuating Gasoline Prices

36 Fluctuating Gasoline Prices A legitimate concern that comes and goes Use a contract addendum to adjust compensation on a temporary basis

37 Covering Routes In Emergencies

38 Covering Routes In Emergencies OK if it s a real emergency, but the carrier must still be charged If it s ongoing, it s going to come back to haunt you The DM should never allow self to be viewed by the carrier as a potential substitute

39 Carrier /Subscriber Contact

40 Carrier /Subscriber Contact As a general rule, don t restrict unless customers are complaining about it OK for subscribers to have a communication option, if the carrier wants to provide one.

41 Manage With A Soft Touch Administer the contract-not your personal preferences Be a resource-not a boss