[Hypothetical Employment Legal Filter] In the following hypothetical employment situation, is the law being broken? If so where? Is it legally worth pursuing this and putting a hypothetical person’s business prospects in jeopardy?
posted by anonymous to Law & Government (8 answers total)
You are not the hypothetical person’s lawyer. You are not providing definitive legal advice. You may however have an idea as to whether and where various employment laws are possibly being broken in this hypothetical scenario, and whether there is something here that should be pursued legally.
A hypothetical small franchised business, hypothetically in MA, which provides a service to customers uses a combination of employees and self-employed freelance consultants to provide training services to their customers. To be allowed to operate as a freelance consultant, within the facility one must work for a period of time as an employee. The skill set the job requires is semi-skilled labor and requires a combination of customer facing sales as well as the training.
There are no employee manuals, or written policies. Employees have never signed off beyond two forms of ID.
Employees perform three separate types of duties. One is the actual training, which is paid at roughly three times base pay. The second category of pay is performing the same duty as a regular training session, but it is complimentary training (and is used as to leverage sales), this is paid at slightly above minimum wage, we’ll say 1.5x base pay. The third category is focused on attracting sales and is paid at base pay. This category is only offered in two and three hour increments, at fixed intervals on a first-come-first-serve scheduling basis. Each employee is required to perform at least three shifts worth of these hours a week. To keep employees focused, there are periodic staff meetings which last approximately an hour and are unpaid. Lastly, dependent on performance, there are opportunities for bonus pay. It hypothetically gets more complex than this, but this is a good start. Employees at their best schedules work between 24-36 hours – never really attaining a full-time status.
From this, one would think payroll would be a nightmare, but the business simplifies this by just using one pay rate, and modifying the hours worked to meet whatever payout they need to: Train for two hours (2x 3x = 6 units), train two complimentary sessions (2x 1.5x = 3 units) and work five hours of customer service (5 units) and your paycheck reads 14 hours of base pay, despite only having worked nine hours of actual time. Asking to rectify the payroll information is met with a “no”.
On to “earning one’s right to go independent”:
To hypothetically go independent, a hypothetical person must work for the company for a year and meet certain sales goals 80% of the time. Arguably these hypothetical sales goals are not attainable, but ignoring this, these are the stated policies. The hypothetically best performing employees are regularly unable to meet these goals – perhaps individually hitting the goals for 4 out of 12 trailing months at their absolute best performance.
Being independent is not necessarily better.
For starters, the business collects a usage fee. It is a flat rate fee in most cases; however in the hypothetical situation that the independent contractor performs the training to a group instead of an individual, the business collects a fixed percentage of total sales and waives the usage fee.
Next, the business does not allow for the independent contractor to perform their own customer service time (on their own dime) – it is strictly an allowance for the act of training only.
The one benefit of being independent is that the business allows the contractor use of their credit card system: the client pays the business, the business pays the independent contractor minus their stated fee.
In many regards, this means being an independent contractor becomes a less desirable state.
And now the hook:
Now… after a year and a half working for the business, one of the best hypothetically best performing employees gets pregnant. Hypothetically, the pregnancy is rough and begins limiting job function. The employee scales back their job duties, failing to meet certain sales goals, failing to meet required customer service hours. Hypothetically, one month before the planned maternity break, the business states that the hypothetical employee is eligible for going independent, and that they would recommend the employee stay on for a little bit post-pregnancy and then make the transition to independent. There are no stated maternity policies. Since the job is hourly / less than full time, the legal statements in MA law start to read muddily; however, the employee states that they will consider it.
Fast forward to one week before the employee is ready to return for work. Hypothetically the employee meets with the employer and states they will stay on as an employee. Hypothetically the manager seems to agree in person. Hypothetically the employee contacts their clients to prepare for the return to work. Two days later, via email, the manager hypothetically states that they rescind the offer to return as an employee, but that they have the paperwork together for work as an independent contractor.
The employee’s hypothetical clients have pre-paid for their training. The business offers no refunds. The employee does not get paid if the employee does not work. It is possible that the employee may still get to train (and be paid out) the balance of these clients training before going independent.
Was the hypothetical employee terminated? If so, should this termination have been protected by the medical condition of pregnancy? Is the employee better off to go on their own and ignore the events, or should the employee pursue some level of legal action? Pursuing legal action will undoubtedly eliminate the opportunity to be an independent contractor. How is unemployment handled if that is the situation?
If it comes to it, there are roughly twenty-four hours to lawyer up regarding the independent contractor decision to at least stall the process.