Why Your Risk Just Went Up
The National Labor Relations Board (NLRB) unveiled a new standard for determining which employees are considered employees and which are considered contractors. Over the past few months, most government regulators have been cracking down on businesses that misclassify employees as contractors. These rules may make more entertainment firms responsible for labor law violations committed by contractors and staffing agencies in wage and hour benefits.
Previously, employers were responsible only if they had direct control over working conditions. This ruling will impact temporary staffing firms which currently employ over 3 million people. In some cases, these “contractors” may be deemed joint employees.
California regulators are cracking down on businesses that try to skirt the employee/employer relationship by identifying certain individuals as contractors. Here is a good test:
The six factors, or questions, in the “economic realities” test include:
1. Is the work an integral part of the employer’s business?
2. Does the worker’s managerial skill affect the worker’s opportunity for profit or loss?
3. How does the worker’s relative investment compare to the employer’s investment?
4. Does the work performed require special skill and initiative?
5. Is the relationship between the worker and the employer permanent or indefinite?
6. What is the nature and degree of the employer’s control?
The staff at John Hart Insurance has over 60 years combined experience in the field of entertainment insurance. We focus exclusively on understanding the unique needs of motion picture, television, video, music and theatrical companies. This knowledge base allows us to structure an insurance program specifically for each client that will be a balance of the best coverage and most economical solutions to help them manage the risks inherent to their unique businesses.