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NLRB Rules that Misclassifying Workers Does Not Violate Labor Law

Nicholas J. Golding, Labor and Employment Law Attorney, KDDK

Nicholas J. Golding, Attorney

On August 29, the National Labor Relations Board issued its decision Velox Express, Inc., 368 NLRB No. 61.  Reversing course from the Obama-era, a Board majority held 3-1 that employers who misclassify their workers as independent contractors instead of employees do not violate the National Labor Relations Act (“Act”).

Deciding in favor of employers, the majority ruled that an employer who incorrectly classifies workers as independent contractors does not violate the Act because the misclassification is merely an expression of a legal theory and does not contain any “threat or reprisal of force or promise of benefit” in violation of the Act.

Key to the majority’s decision was its concern that holding such misclassifications violate the Act would discourage employers from using independent contractors.  The majority noted that employers have the difficult task of determining a worker’s correct classification, which requires employers to apply a multitude of legal standards under numerous federal, state, and local workplace laws.  The majority held that making a misclassification a stand-alone violation of the Act would also improperly shift the burden of proof to employers.

This decision should help alleviate employers’ concerns when classifying employees, but employers must make sure statements regarding worker classifications are free of threats or coercion.  For additional assistance in this area, please contact attorney Nick Golding at ngolding@KDDK.com or (812) 423-3183, or contact a member of the KDDK Labor and Employment Law Practice Team.

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