Major cities in the State of California hold a lot of Trade Shows for promotional and marketing of different companies. Recently there has been a proliferation of these exhibiting companies using third party staffing agencies for booth personnel and other promotional activities during these shows.
These so called third party staffing agencies still employ exhibition staff and brand ambassadors as independent contractors or W9 category which hopefully in the very near future the State of California will require these agencies to convert to W2 or employee categories for their personnel.
Some of the mis-classification violations in these marketing endeavors are these exhibiting companies requiring sales goals to independent brand ambassadors per hour, per day and at the end of these shows. Sometimes there are so called apps to be downloaded, signed on and promotional codes to be redeem with such goals. In doing this the brand ambassadors are using their personal smart devices and internet data plans to achieved these goals and not even get reimbursed for the expenses.,
In addition, the exhibiting company interferes with contractor schedules when they think a scheduled individual does not hit the so called sales goal within the first hour the show opens. They also would dis-allocate the said person of whom might be scheduled in the next days by relieving him/her of the assignment and replaced by another person which they think might accomplished the said sales goal.
Likewise, the exhibiting company micro-manages the event entirely to their liking in spite of having independent contractors initially contracted to run the event. This extends to asking access and pictures of contractor's daily time and in out sign in sheet as well as sending the brand ambassadors home early when the show is slow even though they were scheduled to work at the end of the show hours. Before the start of the show the so called exhibiting company conducts a training session heavily emphasizing the sales goals required for the project.
In addition, exhibiting companies interferes with rest and meal breaks without even thinking that brand ambassadors are already working 10 to 14 hour shifts without receiving overtime compensation as they are not employee classified.
The sales goals are also micro-manage per hour by way of the exhibiting company communicating every hour, daily, end of the show and two weeks after when said sales goals are achieved or not. Some of these companies will even get back two weeks after questioning the validity of the emails generated integrity and validity.
There are so much violations that entails in this industry and bottom line the brand ambassadors who just wanted the additional income as independent contractors does not deserved to be in such ordeals.
I will end by citing the excerpts from the National Federation of Independent Businesses with the categorization.
FACTORS: The Common Law Test consists of twenty factors.
Not all of the factors need to be present in every case
in order to make a determination about classification.The
test merely weighs the existence of factors indicating a level
of control against those factors showing independence.
1. INSTRUCTIONS
a. Employee: provided with instructions from the
business regarding when, where and how to
perform the work.
b. Independent Contractor: decides when, where
and how to accomplish the services he or she is
providing.
2. TRAINING
a. Employee: receives training directly from the employer,
demonstrating that the business wants the
services performed in a particular manner.
b. Independent Contractor: receives little or no training
from the business, but rather, hiring is based
on pre-existing proficiency or expertise in a particular
line of work.
3. SERVICES RENDERED BY THE WORKER
PERSONALLY
a. Employee: personally performs any assigned duties.
b. Independent Contractor: free to hire employees or
subcontract tasks.
4. SET HOURS OF WORK
a. Employee: works hours established by the
employer.
b. Independent Contractor: retains the ability to
set own hours.
5. REALIZATION OF PROFIT OR LOSS
a. Employee: receives pay for time and labor only
without realizing any additional gain or sharing
in the risk of loss realized by the company based
on the worker’s services.
b. Independent Contractor: personally stands to gain
or to lose economically based on performance of
his/her services.
6. TIME REQUIRED
a. Employee: usually devotes his/her employment to
the business; full-time employment could prevent
the worker from engaging in other gainful
employment.
b. Independent Contractor: does not necessarily
work solely for one business and remains free to
pursue other projects.
7. DOING WORK ON EMPLOYER’S PREMISES
a. Employee: performs services on the premises of
the employer to the extent which the nature of the
services requires the work to be done on the employer’s
premises. If the business has the right to
compel the worker to perform services at an
alternative specified location, then the level of
control remains the same.
b. Independent Contractor: chooses where to
perform the services.
8. ORDER OR SEQUENCE OF THE WORK
a. Employee: required to perform services in the
order set by the employer.
b. Independent Contractor: retains the option
of deciding the sequence in which the work is
performed.
The Common Law Test
2 In 2006, the IRS issued a revised test that consolidated the 20 factors into 11 factors, divided into three groups: (1) behavioral control,
(2) financial control, and (3) the type of relationship between the parties. Functionally, this new test is very similar to the 20-factor
test. IRS Publication 15-A lists the factors and is available at www.irs.gov/publications/p15a/ar02.html#d0e346.
9. CONTINUING RELATIONSHIP
a. Employee: a continuing, non-sporadic relationship
exists between the business and the worker.
b. Independent Contractor: free to perform a service
and then move on to other projects.
10. HIRING, SUPERVISING AND PAYING ASSISTANTS
a. Employee: may hire assistants only under the direction
of the employer.
b. Independent Contractor: free to hire, supervise
and pay additional assistants or subcontractors as
necessary.
11. INTEGRATION OF THE WORKER’S SERVICES
a. Employee: services are integrated into the daily
success and operation of the business.
b. Independent Contractor: services provided do not
substantially affect the overall success of the
business.
12. ORAL OR WRITTEN REPORTS
a. Employee: submits regular reports to the employer
for whom the services are being performed.
b. Independent Contractor: accountable for end results
only and not necessarily required to provide
regular reports.
13. PAYMENT METHOD
a. Employee: paid by the hour, week or month.
b. Independent Contractor: paid by the project or on
a straight commission.
14. PAYMENT OF BUSINESS EXPENSES
a. Employee: the business usually pays expenses for
the worker.
b. Independent Contractor: pays for own business
and traveling expenses.
15. FURNISHING OF TOOLS AND MATERIAL
a. Employee: receives tools and equipment from the
employer.
b. Independent Contractor: provides tools, equipment
and materials.
16. SIGNIFICANT INVESTMENT
a. Employee: depends on the continued success of the
business without taking on any investment in the
working facilities or equipment.
b. Independent Contractor: invests in facilities or
equipment used to perform any services, showing
that the worker is in business for himself/herself.
17. WORKING FOR MORE THAN ONE BUSINESS
a. Employee: restricted, either explicitly or effectively,
from providing services to several businesses at
once.
b. Independent Contractor: free to provide services
to multiple, unrelated businesses at the same time.
18. AVAILABILITY OF SERVICE TO THE GENERAL
PUBLIC
a. Employee: provides services to only one business.
b. Independent Contractor: offers services openly to
the general public.
19. RIGHT TO FIRE THE WORKER
a. Employee: employer maintains the discretion to
discharge a worker.
b. Independent Contractor: may not be terminated as
long as the performance proceeds according to the
agreed-upon terms.
20. WORKER’S RIGHT TO QUIT
a. Employee: generally has the right to terminate the relationship
with the business at any time.
b. Independent Contractor: must fulfill any contractual
obligations or else risk liability for breach.
https://eventspeak.com/co-employment-liability-every-brand-agency-needs-know
http://www.dol.gov/whd/regs/compliance/whdfs13.htm
