Expanding Organizing Opportunities, the NLRB Overturns Trump-Era Employee Classification Standard

A crucial question many workers and labor unions face is whether a worker is an employee or an independent contractor. The question arises because employees receive unemployment benefits, and they are protected under wage and hour laws, workers compensation, and workplace discrimination laws. Employees are also covered by the National Labor Relations Act, meaning they have a legal right to organize unions. Independent contractors do not receive these same protections.

Thankfully, in The Atlanta Opera, Inc., 372 NLRB No. 95 (2023), the National Labor Relations Board just made it easier for workers to assert their status as employees. In doing so, the Board reversed a 2019 decision called SuperShuttle, which created a confusing and restrictive “entrepreneurial opportunity” test. By contrast, the standard established in Atlanta Opera follows the “common-law agency test,” which weighs a list of factors to determine whether a worker is an employee or an independent contractor. The factors include:

• The extent of control which the employer may exercise over the details of the work.

• Whether or not the worker is engaged in a distinct occupation or business.

• The kind of occupation, including whether work is usually done under the direction of the employer or by a specialist without supervision.

• The skill required in the particular occupation.

• Whether the employer or the worker supplies the instrumentalities, tools, and the place of work for the person doing the work.

• The length of time for which the worker is employed.

• The method of payment, whether by the time or by the job.

• Whether or not the work is a part of the regular business of the employer.

• Whether or not the parties believe they are creating the relation of master and servant.

• Whether the principal is or is not in business.

What this means for labor unions is that workers that have been historically excluded from seeking union representation based on the unclear distinction between employee and independent contractor status, such as the makeup artists, wig artists, and hair stylists at issue in Atlanta Opera, can more strongly assert their statutory right to organize.

If you have any questions about these issues, contact your labor law counsel.