SCHROEDER
EMPLOYMENT LAW
Spring 2011
1. Intro –
a. Lemmerman
i. Who is an Ee? THRESHOLD QUESTION
1. Whether an individual is an ee is a threshold question for determining whether the person is included or excluded from the protection of certain acts.
a. Note: Possible to be an ee under one act, but not under another.
b. Note: Possible to be illegally employed (i.e. children or illegal alien/undocumented worker) but be considered a statutory ee
2. Rationale is that the ee needs the protection as statutory ee’s or the er’s would be encouraged to hire them. BUT, public policy reasons will sometimes hold that illegally employed workers are not ee’s, so decedent’s estate can sue in tort. E.g., courts have split over whether illegally employed minors, injured or killed on the job, should be limited to workers’ compensation.
3. EE usually wants to be classified as an ee b/c she receives more rights under statutes.
4. EE usually does not want to be classified as ee if she wants to sue in tort.
5. Can claim punitives, disfigurement, pain and suffering, etc. in tort and get more damages.
6. Limited to wage replacement and medical expenses under worker’s comp. statutes
7. BUT, er has more defenses when ee sues in tort (i.e. contributory negligence and comparative fault).
8. Note: if court holds individual to be common law ee for one reason, they will be ees for all reasons.
9. Whether or not someone is an ee is rarely litigated b/c it is obvious.
ii. EXPECTATION OF PAY- Indicia of whether an individual is an ee is that both the ee and the er had an expectation that the ee would be paid. Lemmerman v. A.T. Williams Oil Co Other factors that are irrelevant if not done, but would be indications of employment if done (if not, can indicate independent contractor relationship):
2. i. er’s payment of S.S.
3. ii. Filling out of timecards
4. iii. Getting federal tax i.d. number
5. iv. Completion of W-2
6. v. Withholding of fed/state taxes (if pay enough)
7. vi. Payment into unemployment compensation fund.
i. superior Court is divested of original juris of all actions which come within the provisions of Workmen's Comp Act. Act provides that its remedies shall be an employee's only remedies against his employer for claims covered by Act. N.C.G.S. § 97-10.1 (1985). Remedies available at common law are specifically excluded. Therefore, question of whether p was d's employee as defined by the Act is clearly jurisdictional (SMJ – IF HES NOT, then they don’t have SMJ). This issue is not affected by the fact that the minor may have been illegally employed because the Act specifically includes within its provisions illegally employed minors. N.C.G.S. § 97-2(2) (1985). Therefore, if the Industrial Commission has juris over the claim of an illegally employed minor and the superior court does not, the superior court would have the duty to raise this issue ex mero motu. P was employee of D. SO he falls in the workmens comp act. DOENST matter he was illegally employed. THIS IS IN THEIR SMJ. (doesn’t matter that he wasn’t on payroll list, no Soc Sec, but he was working, paid often, and excepted to be paid, and store mgr expected to pay him).
b. Donovan v. dialamerica- Sureway test to see if ones an employee – 1) degree of alleged employer's right to control manner in which work is to be performed; 2) alleged employee's opp. for profit or loss depending upon his managerial skill; 3) alleged employee's investment in equipment or materials req for his task, or his employment of helpers; 4) whether service rendered requires a special skill; 5) degree of permanence of working relationship; 6) whether service rendered is an integral part of the alleged employer's business.—In addition, Sureway instructs that neither the presence nor absence of any particular factor is dispositive and courts should examine “circs of the whole activity,” and should consider whether, as a matter of economic reality, the individuals “are dependent upon the business to which they render service.
i. THE standard for determining “employee” status under FLSA
– “Employee” is defined by FLSA as “any individual employed by an employer.” 29 U.S.C. § 203(e)(1) (1982). “Employer” includes “any person acting directly or indirectly in the interest of an employer in relation to an employee. . . .” 29 U.S.C. § 203(d) (1982). Act states “'Employ' includes to suffer or permit to work.” 29 U.S.C. § 203(g) (1982). FLSA HAS BRAODES EMPEE DEFINITION bc of its extra def of employ.
c. Here bc dc misapplied legal test for determining “employee” status under FLSA, held dc erred in concluding home researchers were not employees of DialAmerica (THEY ARE ACT EMPEES). but, held dc did not err in its conclusion distributors were independent contractors, not employees. agree with dcs determination that Secretary's position in this case was substantially justified and therefore DialAmerica is not entitled to an award of attorneys' fees.
1. Degree of the alleged employer’s right to control the manner in which the work is to be performed;
a. High → employee;
2. Employee’s opportunity for profit/loss depending upon managerial skill
a. High → independent contractor;
3. Employee’s investment in equipment or materials required for his task, or his employment of helpers;
a. High → independent contractor;
4. Whether the service rendered requires a special skill;
a. Yes → independent contractor;
5. Degree of permanence of the working relationship;
a. High → employee;
6. Whether service rendered is an integral part of the employer’s business;
a. Yes → employee;
7. **In addition, courts should examine the overall circumstances and should consider whether, as a matter of economic reality, the individuals “are dependent upon the business to which they render the service”;
Class notes – aren’t these workers really just employees of the Distributors?
i. Distributors pay them, recruit them;
ii. How can it be that DialAmerica may be held liable for paying HRs minimum wage?
1. Doctrine of Joint Employers – it’s possible that more than one entity could stand in the position of “employer”, so that they both might be liable under the statute;
2. Can’t look to third party for contribution b/c no provision in the FLSA saying that you can sue a co-employer.
a. Should always get indemnity by K if you may be a co-employer;
e.
i. Common law employment test: Agency criteria (equal weight for all factors). (As outlined in Darden):
1. Hiring party’s
he relationship between the employer and the employee, as compared to the service aspect of the relationship, [is] predominant.” Treas. Reg. § 31.3121(b)(10)-2(d)(3)(i), 26 CFR. § 31.3121(b)(10)-2(d)(3)(i) (2005). SO doctors who serve as med residents are properly viewed as “student[s]” whose service Congress has exempted from FICA taxes under 26 U.S.C. § 3121(b)(10)? they have to contribute to FICA AND they’ll get this for their SS funds later. NOT exempt as students under 26 Usc § 3121(b)(10). not yet begun their “working lives” because they are not “fully trained.
i. Nanny tax/housecleaners – not doing the employee tax payment forms with IRS. What rules are is: to make sure you can work in US with an i9, then get an employee ID number, then pay fed taxes for SS and medicare, then income taxes, the star unemployment tax, then workers comp coverage dep on state. File the section H for your household employment tax form, then recordkeeping. YOU COULD be in trouble if nanny file unemployment. Day care better option?
ii. Microsoft- contractors paid twice what employes make but the don’t get fringe bens or stock interest. Stock went up so ways empees ben for working hard. LIKE IN DIALAMERICA.
8. Hiring
a. Egligibilty to work
i. Handout – Immigration reform and control act of 1986; IRCA 8 USC § 1324a= IN CASE BELOW:
ii. 8 usca 1324a Unlawful employment of alien
a. 1- PERSON who employ of unath aliens (ok if its just one) is unlawful. KNOWING alien is unauth as in h3 or w/o complygin with b
b. – 2- cant continue if you learn hes an alie
c. 3- defense – if complied in gf with reqs of
2. b – employment verification –
a. – 1- attestation after examination of documentation – person or entity need fill out the form by the AG; esatb employ authorization and ID or docs of ev of employe auth AND docs estab id of person.
i. 1324 ab1a = examine doc and it REAS appears on its face to be genuine.
ii. – cant get docs until hired and then after that they have 3 days to produce them.(8 C.F.R. § 274a.2(b)(ii))
iii. -2 – individual attestation of employment authorication – person himself must attes that hes a citizen of lawful alien
retention of verification form – employer must retain this form
