By Michael P. Sams, Esq.

The Massachusetts Legislature amended the so-called “Independent
Contractor” statute, G.L. c. 149, §148B, in 2004. The amendment made it much more difficult to classify someone as in independent contractor as opposed to an employee. We’ve discussed the amended statute in detail in articles, newsletters and at meetings in the past. This article will update you on the Attorney General’s Advisory, re-interpretating the statute.

As you know, the real significant change to the statute in 2004 is that now, anyone who performs work that the hiring entity itself performs, must be considered an employee, not an independent contractor. There had been an exception to this before the statute was amended but that exception has been removed. Compounding the significance of this amendment was the Attorney General’s initial interpretation of it. Specifically, the Attorney General’s initial advisory provides a very strict reading of the amended statute, making it is as difficult as possible to classify someone as an independent contractor. In the new Advisory, however, which supersedes the previous one, the Attorney General has clarified its position, seemingly lessening its constrictive prior interpretation.

In the new Advisory, the Attorney General’s Office stated as follows:

• In its enforcement actions, the Attorney General’s Office will consider whether the service the individual is performing is necessary to the business of the employing unit or merely incidental in determining whether the individual may be properly classified as other than an employee… .

(emphasis added). If the work is necessary to the business of the employing entity, the individual(s) hired must be considered employees.

Accordingly, in assessing whether someone is an independent contractor or an employee, you need to determine whether you have hired that person to perform work that is a necessary part of your own operations. A few examples that the Attorney General’s Office provided are as follows:

• A drywall company classifies an individual who is installing drywall as an independent contractor. This would be a violation of prong two because the individual installing the drywall is performing an essential part of the employer’s business.
• A company in the business of providing motor vehicle appraisals classifies an individual appraiser as an independent contractor. This would be a violation of prong two because the appraiser is performing an essential part of the company’s business.
• An accounting firm hires an individual to move office furniture. Prong two is not applicable (although prongs one and three may be) because the moving of furniture is incidental and not necessary to the accounting firm’s business.

Author:

Michael P. Sams, Esq.
Kenney & Sams, P.C.
Framingham Corporate Center
492 Old Connecticut Path
Framingham, MA 01701
(508) 665-4299
http://www.KandSlegal.com