© 2025 Seyfarth Shaw LLP Massachusetts Wage & Hour Peculiarities, 2025 ed. | 129 court and the Attorney General’s opinions do not have the force of law, litigating these cases is expensive and the Attorney General’s opinion is entitled to some deference.746 Companies doing business in Massachusetts are well advised to undertake a careful legal analysis before classifying any worker as an independent contractor.747 A. The Threshold Question A threshold question is whether the statute applies. The statute may be triggered whenever an individual provides services to a putative employer.748 This is usually satisfied when an individual provides services directly to an entity. However this threshold question can be more complicated when the worker is supplied by or through a third party business entity. Ordinarily, a company that contracts with another business entity for services “would not be liable for misclassification of the third-party workers.”749 In such circumstances, “the individual may not have standing to pursue a misclassification claim, because the statute was not intended to bar legitimate business-to-business relationships.”750 However, the SJC has identified three exceptions to this general rule: (1) when the two entities are alter egos; (2) when the relationship between the two entities is a scheme designed to make an end-run around wage law obligations; and (3) when the two entities are joint employers.751 • The contracting entity provides equipment, tools, and supplies to individuals or requires the purchase of such materials directly from the contracting entity • Alleged independent contractors do not pay income taxes or employer contributions to the Division of Unemployment Assistance Massachusetts Attorney General Advisory 2008/1, at 5-6. 746 Smith v. Winter Place LLC, 447 Mass. 363 (2006) (Attorney General’s interpretations of the wage and hour statutes are entitled to substantial deference so long as they are not inconsistent with the plain language of the statutes, but they do not have the force of law). As noted above, the Department of Revenue has not adopted the test set forth in Section 148B. 747 In prior decades, there was little case law interpreting the Independent Contractor Statute. In recent years, however, plaintiffs’ attorneys have filed large numbers of cases under the statute, creating the opportunity for courts to clarify the scope of the law. 748 See M.G.L. ch. 149, § 148B(a) (explaining that it covers any person providing services); Sebago v. Boston Cab Dispatch, Inc., 471 Mass. 321, 329 (2015) (explaining that the threshold question is whether the plaintiff provided services to the defendant); Gallagher v. Cerebral Palsy of Mass., 92 Mass. App. Ct. 207, 210 (2017). While ordinarily this is a question of fact, a court will also consider a regulatory framework that describes the relationship between the parties. See id. at 210-14 (holding that a personal care attendant did not provide services to a fiscal intermediary pursuant to MassHealth regulations). 749 Jinks v. Credico (USA) LLC, 488 Mass. 691, 697 (2021) (quoting Depianti v. Jan-Pro Franchising Int’l, Inc., 465 Mass. 607, 624 n.17 (2013)). 750 Weiss v. Loomis, Sayles & Co., Inc., 104 Mass. App. Ct. 1, 3 (2024) (quoting Chambers v. RDI Logistics, Inc., 476 Mass. 95, 109 (2016)). 751 Jinks, 488 Mass. at 697-99. Alter ego status is based on the doctrine of corporate disregard by which courts may ignore corporate formalities. To establish alter ego status, a plaintiff must show the following factors: (1) common ownership; (2) pervasive control; (3) intermingling of business assets; (4) thin capitalization; (5) nonobservance of corporate formalities; (6) absence of corporate records; (7) no payment of dividends; (8) insolvency at the time of the litigated transaction; (9) siphoning away of corporate funds by dominant shareholder; (10 non-functioning of officers and directors; (11) use of the corporation for transactions of the dominant shareholders; and (12) use of the corporation in promoting fraud. An “end-run” relationship can occur when the putative employer designed and implemented the framework under which another entity’s workers are misclassified as independent contractors specifically to evade the obligations under the wage laws. Id. at 697-98. Joint employment is discussed in Section IX.
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