Labor & Employment Law

You Can't Win For Losing: Even If Proper Classification Would Have Resulted in Lower Pay, Plaintiffs Still Get Damages!

By Mark E. Tabakman, Esq.

In Somers v. Converged Access Inc., Massachusetts' highest court ruled that an employee misclassified as an independent contractor can seek damages from an employer even if the employer can show that the employee would have been paid less if properly classified. Sounds unbelievable, but nevertheless is still the case!

Somers alleged that he should have been classified as an employee and received benefits accordingly. The lower court granted summary judgment to Covered Access, Inc. on all counts.  Although it found that there was an issue of material fact as to whether Somers was misclassified, the court held that to be academic because Somers was paid much more as an independent contractor than he would have been as an employee.

Interestingly, the Massachusetts Supreme Court took the case on its own initiative. The Supreme Court rejected the lower court's finding that if an employee is found to be misclassified as an independent contractor, the employee's pay must be treated as his base wage, as though he were an employee, for the purpose of calculating damages. Indeed, in a blow to employers, the Supreme Court stated '[a]n employee misclassified as an independent contractor, as a matter of law, is an employee; his contract rate is his wage rate; and his 'damages incurred' equal the value of wages and benefits he should have received as an employee, but did not.'

The decision should be a warning to employers to make sure your independent contractors truly are independent, because if a person is misclassified as an independent contractor, he can still seek damages even if as an employee he would have been paid less. Like Ripley said, believe it or not!

Full post as published by Wage & Hour - Development & Highlights on September 10, 2009 (boomark / email).