800 222 8711 Contact Us Pay My Bill Submit a Claim
Search magnifying glass icon

Murphy Insurance News & Articles

rss

topics of interest to you

 

Does your business use “independent contractors”? If so, are you in compliance with Massachusetts Independent Contractor Law (MICL)? (M.G.L. c. 149, §148B) Established in 1990, the law initially focused on the construction industry; however, changes in 2004 created a very strict “three prong test”, which expanded implications to many other types of businesses. As a result, many businesses that have used “independent contractors” can no longer classify these workers as such.

Three Prong Test

In order to be classified an “independent contractor”, a worker must meet ALL three of the following criteria:

  1. the worker is free from employer’s control and direction in performing the service, both under a contract and in fact;
  2. the service provided by the worker is outside the employer’s usual course of business; and
  3. the worker is customarily engaged in an independent trade, occupation, profession, or business of the same type.

What Should Businesses Do?

Companies using independent contractors need to re-evaluate these relationships to determine whether the worker classification is proper under the MICL. After the evaluation, it may become clear that certain workers are misclassified under the MICL test and should be treated as employees. If an employer identifies an issue but does nothing, they risk stiff penalties as noncompliance with the MICL is not taken lightly.

The Attorney General can issue civil citations and institute criminal prosecution for both intentional and unintentional violations of the MICL. Willful violations can result in substantial fines or possible imprisonment. In some instances, fines levied may be in triple damages.

Because of this law, many businesses may stop using certain (or all) independent contractors, or decide to change the status of these workers to employees. While independent contractors are important to many businesses, the MICL and three-prong test make improper classification a greater risk that Massachusetts businesses must address.

Get more information on the Massachusetts Independent Contractor Law.

 

Showing 0 Comment







b i u quote



Save Comment

 

The information provided in these articles are only general descriptions and should not be relied upon as complete, correct or accurate for your specific situation. All coverage informaiton is subject to policy provisions, endorsements and may be  subject to your meeting underwriting qualifications. Murphy Insurance Agency is not engaged in rendering legal, accounting or other noninsurance professional services. Consult an appropriate professional for advice regarding your own situation.