Employee classification 102: The who and how

By Emma Peterson. 

From branding and exclusivity to duration of work and advertising, discover the key factors that determine worker classification. 

With subcontractors, independent contractors and non-traditional employee roles, it can be hard to figure out how to properly classify your team. To get some clarity on employee classification, we sat down with Benjamin Briggs of Adams and Reese for an episode of Roofing Road Trips®. Benjamin is a board-certified labor and employment attorney, making him the perfect person for this discussion. In an earlier article, we talked to him about why employee classification is so important to understand and some of the common mistakes he sees related to it. In this article, we’re diving into how to classify your employees and who to go to for help.  

How do you properly classify your workers? 

The good news is that classification doesn’t change much from state-to-state, so once you get a handle on it, you’ll be good to go! But how do you get a handle on it? Benjamin said you have to look at something called an economic realities test. He shared what this test is, explaining, “The economic realities test looks at a handful of different factors which collectively decide on the classification of a worker.” 

These factors include:  

• Exclusivity: If a worker is only working for you exclusively, you may get questioned about their classification. Benjamin elaborated, “One of the trademarks of an independent contractor is that they're in business for themselves. So, while they're working for you, in theory, they're also available to work for other companies. In other words, is there exclusivity happening? Because exclusivity often makes them look more like an employee.” 
• Duration: The test looks at how long you and the worker have collaborated, and how consistently. Benjamin explained, “If they just work for you intermittently, sporadically, they might do a project for you this month, maybe another project for you in a couple months and that looks like a traditional independent contractor.”   
• Branding: If your workers show up in a truck with your logo or wear a shirt or hat with your logo, that can call into question their classification. As Benjamin put it, “If they have their own trucks, their own equipment, their own hats and whatnot. That looks a lot like an independent contractor. If they’re in your stuff, that looks like an employee.”  
• Advertising: Things like websites and social media are also used to determine a classification. Benjamin gave an example, “If a sub has their own website, social media and advertisements, that looks like an independent...If they have no website, no advertisement and no social media, it looks like they're an employee.”  

These are just a few of the factors that the economic realities test examines, but it gives a good basis for understanding how to start classifying your workers. In Benjamin’s words:  

If it walks like a duck, it talks like a duck, it's a duck, even if you decide to call it a dog. The law doesn't care what the parties label their relationship. They look at the economic realities, those factors we talked about, as well as a handful of others, to decide on the whole whether a worker collectively looks more like an employee or more like an independent contractor.  

Who can help you?  

This entire process can be overwhelming for a lot of business owners. Luckily, you’re not alone, there are people who can help – people like Benjamin! The best course of action for owners concerned about misclassification is to proactively reach out to legal professionals for advice. Benjamin explained, “I always recommend semi-regular internal audits to make sure everything is in place proactively. And if you need help with that, the best advice I can give is to lean on the resources you have.” 

These resources include everything from more general articles and podcasts on RoofersCoffeeShop® to calling up attorneys like Benjamin for personalized assistance.  

Listen to the whole episode or Watch the recording to learn more about employee classification.