1. Bosler, Barbara JD, MHE, RHIA

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The National Association for Home Care & Hospice highlighted the U.S. Department of Labor's classification guidelines for independent contract workers as a result of a July 2015 U.S. District Court ruling involving home healthcare. In Hughes v. Family Life Care, Inc., the plaintiff brought an action against Family Life Care, Inc. (FLC) for not paying her for overtime and other relief under the Fair Labor Standards Act, 29 U.S.C. [S][S] 201-219 (FLSA). FLC asserted that she was an independent contractor and exempt from FLSA protection. The Court indicated that under the FLSA, an individual is determined to be an employee or independent contractor based on the economic reality of the parties involved (National Association for Home Care & Hospice, 2015). Assessing economic reality requires applying multiple factors to evaluate whether someone is in business for themselves or economically dependent on an established employer for their livelihood (U.S. Department of Labor, 2015). In applying the Hughes facts to these factors, we can see how the U.S. District Court for the Northern District of Florida concluded she was an employee and not an independent contractor (Hughes, 2015).


A. Is the Work an Integral Part of the Employer's Business?


The Court determined Hughes met the "employee" definition because she was a Certified Nursing Assistant (CNA) and contracted for work through a nurse registry to provide personal care and housekeeping services at a patient's residence. FLC is in the home healthcare business and Hughes was a CNA performing job duties integral to this type of business.


B. Does the worker's managerial skill affect the worker's opportunity for profit or loss?


The focus here was FLC's scope of work for Hughes and whether she used technical or managerial skills. The Court determined that Hughes was employed for her technical skill. She was paid hourly for shift work and there was no opportunity to increase her income by exercising managerial skills or negotiating other work contracts. She was paid solely for the hours she worked, resulting in no economic loss to FLC.


C. How does the worker's relative investment compare to the employer's investment?


The inquiry here is which party is responsible for the equipment and materials necessary to complete the work. The Court determined this factor was a draw because neither party supplied the premises where the work was performed. Hughes provided her own scrubs and paid for transportation to and from a patient's residence. FLC was not required to provide anything.


D. Does the work performed require special skill and initiative?


Here, the Court looked at whether FLC was required to equip her with the skills necessary to perform her job. FLC required applicants to be a licensed CNA to complete housekeeping, personal care, and companionship job duties. Hughes became a CNA on her own initiative and kept up her continuing-education requirements with no support from FLC. The Court ruled that Hughes was not dependent upon FLC for her skills.


E. Is the relationship between the worker and the employer permanent or indefinite?


This factor looks at the regularity and duration of the working relationship between the parties. Because Hughes had accepted assignments from FLC on a regular basis for 7 years (2007 to 2014), and often worked more than 40 hours each week, the court determined she had a permanent relationship with FLC.


F. What is the nature and degree of the employer's control?


This factor looks at the nature and degree of an employer's control over an individual and not why the control is exerted. The Court determined that FLC had significant control over Hughes because even though she could refuse work and was able to pick and choose the days worked, she was paid by the hour based on an established rate, and was required to keep a work record of her time. Compensation was withheld if timesheets were not submitted. Further, FLC had a handbook that identified the rules and regulations to be followed by all staff. The handbook included a section on supervision protocols and the grounds for staff discipline and termination.


The Court concluded that four of the six factors weighed in Hughes's favor that she was an employee and not an independent contractor: Control; Opportunity for Profit or Loss; Permanency and Duration; and Integral Part of Employer's Business. The Investment in Equipment or Material factor was a draw for both sides. The Court reconciled the Special Skill factor by determining that even nursing is not a specialty job that people seek to employ someone for private or individual engagements. The Court's point was that when CNAs want to work they are dependent on an employer for work assignments. In this case, Hughes was determined to be an employee of FLC and awarded unpaid overtime compensation and other relief under FLSA (Hughes, 2015).


This case serves as an example of how to apply the factors for the economic reality test and the importance the DOL is placing on employers properly classifying its workforce as employees. Carre (2015) determined from his research that misclassifying workers is not a new problem to the U.S. Department of Labor (DOL). Recent statewide studies support that misclassified workers are found in every part of the workforce ranging from minimum wage positions to professional employment with between 10% and 20% of employers misclassifying a worker as an independent contractor. The significance of classifying an individual as an independent contractor is that they are not entitled to benefits like overtime pay, unemployment insurance, and worker's compensation. The DOL published the administrative guidelines accessible at concurrent with this July 2015 case to reemphasize that most workers are employees under the FLSA, and the scope of this Act is very broad. The DOL's message is that it will use a multiprong approach to correct misclassifications by: a) following up on each complaint received; b) having the Work and Hour Division enter into a memoranda of understanding with cooperative states; and c) working in partnership with the Internal Revenue Service (DOL, 2015).




Carre, Francoise. (2015). (In)Dependent contractor misclassification. Retrieved from[Context Link]


Hughes v. Family Life Care, Inc., 1:15-ev-7-MW-GRJ. Retrieved from[Context Link]


National Association for Home Care & Hospice. (2015). Misclassification of independent contractors gains attention in home care. Retrieved from[Context Link]


U.S. Department of Labor. (2015). Administrator's interpretation No. 2015-1. Retrieved from[Context Link]