By Elise Linscott
Some days are tougher than others. Sometimes, that means staying at the office a few extra hours. At least you're getting some extra dough in the form of overtime pay - right?
Not always. When the line between independent contractor and company employee gets blurry, the finances do too, as demonstrated in a recent case out of Washington.
In the Rodney v. Bankers Life and Casualty Co. case out of Washington Federal Court, the plaintiffs were insurance agents for Bankers Life. Plaintiffs argued they were company employees eligible for overtime pay, while Bankers Life maintained the agents were independent contractors.
When the case first came before King County Superior Court in June 2011, plaintiffs alleged they were owed more than $5 million in overtime pay.
One of the main factors in determining whether the plaintiffs were employees or independent contractors is the "economic dependence test," meaning whether the agents are dependent on the business or if they are in business for themselves, according to a decision issued by Judge Robert S. Lasik on June 30 of this year.
In June, Judge Lasik granted a motion by Bankers Life to decertify the class. "Because a central question in this case is not subject to common proof and would necessitate mini-trials that would overwhelm the litigation, common issues cannot predominate," the document reads.
Plaintiffs were represented by Seattle-based law firm Schroeter Goldmark & Bender. The attorneys declined to comment on the case. A spokesperson for Bankers Life also said the company has no comment on the case at this time.
Carole Vigne, a staff attorney and director of the Wage Protection Program for the Legal Aid Society - Employment Law Center in San Francisco, said that misclassification of employees is common, and advises insurance agents to seek legal aid if they are unsure whether they are legally an employee or an independent contractor and what benefits they’re entitled to.
“It’s certainly very common that employers deem workers to be independent contractors (even when they’re not),” Vigne said. “My sense is they do that for a number of reasons but it is a practice that is incredibly common. I can certainly speculate why employers might do that. One big reason is to not have to follow protective employment laws. As an independent contractor, you are not entitled to very basic protections like wage and hour protections, discrimination protections, if you get injured on the job you’re not entitled to workers compensation… employers also don’t have to pay taxes the way they do with wages.”
Vigne doesn’t recommend agents go directly to their employers if they feel they have been misclassified, and says if they do choose to do so they should certainly take along something in writing – with no formal record of the complaint, it can be hard to prove retaliation if the worker is fired as a result, she said.
