South-Western Legal Studies in Business

Independent Contractor Status Determined by Reality of Relationship, Not Assertions in Contract
Description Appeals court held that when the state looks to determine if a worker is an employee and not an independent contractor, in which case the employer is liable for unemployment compensation contributions, the determination will be based on the circumstances of the relationship, not the assertions made in boilerplate contracts.
Topic Employment Law
Key Words Independent Contractor; Employee; Unemployment Compensation
C A S E   S U M M A R Y
Facts The Massachusetts Division of Employment and Training (DET) held that Boston Bicycle Couriers (BBC) had to make contributions to the state unemployment compensation fund on behalf of its couriers who, DET asserted, are employees, not independent contractors. BBC sought judicial review of the decision and the trial court held in BBC's favor. DET appealed.

Reversed. If there is an employment relationship, then the employer must make contributions to the unemployment compensation fund. The couriers are employees, not independent contractors. They did not use their own business cards or invoices, advertise their services, or maintain a separate place of business and telephone listing. Rather, BBC provided couriers with a telephone and pager; BBC set the rates and commissions; BBC could terminate any worker with 30 days' notice. What the contract between the workers and the employer states is not controlling. Boilerplate language about employment designation may not be used to change the real nature of the relationship. No one factor controls the determination; the courts look to the totality of relevant facts and circumstances of the working relationship.

Citation Boston Bicycle Couriers v. Deputy Director of the Division of Employment and Training, 778 N.E.2d 964 (App. Ct., Mass., 2002)

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