FOR MANY YEARS, the business staffing environment in the United States has been employee-based, but there is a growing shift to an independent contractor model. In fact, independent contractor engagement growth is nine times greater than employee growth. Today one-third of American workers are independent contractors and some are predicting this will rise to 40 percent by 2020. Two driving forces working together have caused this large-scale movement: increased flexibility over working hours on an individual level and economic incentives in the form of decreased staffing costs on the business side.
The golf industry is operating within the gig economy framework whether we care to acknowledge it or not. While the percentages may not be as high as they are nationally, the pressures to move in this direction are just as real. Moreover, the regulatory agencies of both federal and state governments have declared that the misclassification of workers as independent contractors rather than employees is a very serious problem.
The Supreme Court of California heard a case on it on April 30, 2018, as misclassification deprives federal and state governments of billions of dollars in tax revenue and denies millions of workers protections to which they are entitled. This landmark class action ruling, Dynamex Operations West, Inc. v. Superior Court (Lee), abandons a multifactor standard—control of details over wages, hours and working conditions being the principle guideline—that California courts had used for decades to determine employment status (common law, Borello and Martinez).
In short, the court made it much more difficult for companies to classify workers as independent contractors rather than employees. Going forward, the burden shifts to employers if they desire to classify workers as independent contractors and avoid paying wages and benefits the law requires, they must prove they do not control or direct the workers. Employers must prove workers are not part of the usual course of the company’s business and employers must prove workers are running their own businesses. These factors are far broader than the ones previously used and have been adopted in Massachusetts and New Jersey.
The new criteria the California court set to determine how workers are classified will force everyone to take a fresh look at this issue and its potential for sweeping consequences.
For more information on this topic, see the Advocating article on page 6.
Mark Brenneman, PGA, is the chief business development officer for CADDIEMASTER, the premier provider of caddie management and training services with more than 50 partnerships in 22 states and four countries. He can be reached at [email protected] or 702-807-3448. For more information, visit caddiemaster.com.