Massachusetts has some of the most stringent laws in the country governing the classification of employees and places a very high burden on companies to establish that they have properly classified individuals as independent contractors.  In Massachusetts, there is a presumption that someone performing work is an employee. Any company or business who wants to treat someone as an independent contractor can rebut this presumption only by meeting all three requirements under the Massachusetts Independent Contractor Law, M.G.L. c. 149, §148B.  Those three requirements are as follows:

1. the worker is free from the employer’s control and direction in performing the service, both under a contract and in fact;
2. the service provided by the worker is outside the employer’s usual course of business; and
3. the worker is customarily engaged in an independent trade, occupation, profession or business of the same type.

Even if you have signed a contract in which the individual agrees that he or she is an independent contractor, it does not prevent the worker from later bringing misclassification claims.  Unless all three prongs are met, that individual will be considered an employee.  Improperly classifying an employee can result in serious penalties and financial consequences for your company, regardless of whether or not you intended to violate the statute.  If a court determines that you have improperly classified an employee, your company could face civil citations in addition to mandatory treble damages and you may also be responsible for paying the worker his or her attorney’s fees.  You also would be responsible for paying the worker the benefits he or she should have received had the individual been treated as an employee and, in certain instances, you may be responsible for unpaid wages and overtime.   In addition, certain company officials – not just the company – may be held personally liable for damages related to independent contractor classification.

At the Harbor Law Group, we regularly advise companies on the appropriate classification of workers and can assist with drafting independent contractor agreements.  Moreover, we also assist companies who are being investigated by the Massachusetts Attorney General’s Office and defend companies when workers bring misclassification lawsuits