Maryland DLLR ABC Test(with illustrative regs)

A. Direction and Control

1. Employing unit does not require person to comply with detailed instructions about when, where and how the person is to work.

2. Employing Unit does not train the person

3. Employing unit does not set work hours

4. Employing unit does not establish schedule or routine

5. Employing Unit may not fire the person for not following a specific instruction

B. Outside of Usual Course of Business of Employing Unit

1. Person performs work off employing unit’s premises

2. Person performing work that is not integrated into employing unit’s operation

3. Service performed is unrelated to employing unit’s business

C. Independently Established

1. Listing in phone book.

2. Has his or her own place of business

3. Has financial investment in business and can incur loss

4. Has own equipment

5. Employs others

6. Has liability and worker’s comp

7. Performs service for more than one person at once

8. Set own hours

9. Paid by the job

THE TEST APPLIED TO CERTAIN WORKERS

Drywaller– Two Scenarios

Fact Pattern 1 - SCI

  • General Contractor, Inc. (“GCI”), a drywall installation contractor wins a bid for a drywall project for 5 floors of an office building
  • GCI subcontracts 2 of the 5 floors of the building to Sub-Contractor, Inc. (“SCI”)
  • GCI supplies building materials only and directs SCI to deliver the finished product, e.g. the completed drywalling of 2 floors
  • SCI employs 10 workers who are employees of SCI receiving bi-weekly pay with unemployment and income tax withholdings. SCI pays workers comp insurance.

SCI Classification Analysis:

A. Direction and Control –

1. GCI does not require SCI to comply with detailed instructions about when, where and how the work is done.

2. GCI does not train SCI’s workers.

3. GCI does not set SCI’s work hours, but rather is likely to have given a completion date.

4. GCI does not establish SCI’s schedule or routine for the work even though they may define when SCI has access to the job site.

5. GCI may not fire SCI’s workers for not following a specific instruction.

B. Outside of Usual Course of Business

2. While under #3, SCI is performing a service (drywalling) that is related to GCI’s business, SCI is not integrated into GCI’s operation.

The fact that the two companies perform similar type of work is not dispositive in determining SCI’s classification. In applying the test, one is required to do a thorough analysis based on all the facts.

C. Independently Established

.

1. Not known if SCI has it own phone listing.

2. SCI is its own business.

3. SCI presumably has financial investment in businessand can incur loss.

4. SCI owns its own equipment.

5. SCI employs others.

6. SCI has liability and worker’s comp.

7. Not known if SCI performs service for more than one person at once

8. SCI setsits workers’hours

9. SCI is being paidfor the job

Outcome: SCI is an Independent Contractor

Fact Pattern 2 – Worker A

  • General Contractor, Inc. (“GCI”), a drywall installation contractor wins a bid for a drywall project for 5 floors of an office building
  • GCI does not have sufficient workers to meet its contract
  • GCI places an advertisement in the paper for drywall workers
  • GCI supplies building materials and tools to Worker A
  • GCI directs Worker A when to be on the job site and how to perform work
  • GCI pays Worker A per piece of drywall hung
  • Worker A has worked for other companies, but does not have his own company.

Worker A Classification Analysis:

A. Direction and Control –

1. GCI requiresWorker A to comply with detailed instructions about when, where and how the work is done.

2. GCImay or may not have train Worker A.

3. GCI does set Worker A’s work hours.

4. GCI does establish Worker A’s schedule or routine for the work.

5. GCI may fire Worker A for not following a specific instruction.

B. Outside of Usual Course of Business

1. Worker A performs work on GCI’s premises

2. Worker A is integrated into GCI’s operation

3. Service performed is related to GCI’s business

C. Independently Established

1. Not known if Worker A has own phone listing.

2. Worker A does not have own business.

3. Worker A presumably does not have a financial investment in businessand cannot incur loss for this job.

4. Worker Ais using GCI’s own equipment.

5. Worker A does not employ others.

6. Worker A does not have liability and worker’s comp.

7. Worker A performs service for others but not at the same time.

8. Worker A does not set own hours of work.

9. Worker is being paidby the piece.

Outcome: Worker A is an Employee.

Opera Singer – Two Scenarios

Fact Pattern 1 – Diva

  • Ellen Opera singer is asked to appear for a several performancesof Aida with the Baltimore Lyric Opera Company (“Lyric”).
  • Ellen negotiates her contract that provides a lump sum payment to include the costs of her travel, lodging, publicist, voice coach, and personal chef.
  • Ellen performs roles she chooses throughout the world.
  • Ellen is organized as Ellen Opera Singer, Inc.

Ellen Opera Singer Classification Analysis:

A. Direction and Control

1. Lyricnegotiates with Ellen about when she will sing; Lyric does not tell Ellen how to sing.

2. Lyric does not train Ellen

3. Lyricnegotiates when she will fly in for the final dress rehearsal and performances

4. Lyric does not establish Ellen’s schedule or routine.

5. Lyric cannot fire Ellen for not following a specific instruction; they can terminate for nonperformance or breach of contract.

B. Outside of Usual Course of Business

1. Lyric is only one of the venues in which Ellen will perform

2. Ellen is not however integrated into Lyric’s operation; she is a singular.

3. Lyric produces operas, but it does not keep international talent such as Ellen on its rolls on a regular basis.

C. Independently Established

1. Ellen’s number is unlisted; you have to be in the know to reach her.

2. Ellen has her own business.

3. Ellen presumably has financial investment in her businessand can incur loss.

4. Ellen owns her own equipment, not just those precious pipes and those who support her talent but the infrastructure to keep her in the public eye and getting jobs

5. Ellen employs others.

6. Ellen has liability and worker’s comp for her employees.

7. Ellen performs throughout the world but can only sing one aria at a time.

8. Ellen setsher own hours and schedule.

9. Ellen is paidby the job

Outcome: Ellen Opera Singer is an Independent Contractor

Fact Pattern 2 – Sally Songstress

  • Lyric hires singers for a show that will run for 6 months.
  • Sally auditions for and is selected for a part.
  • Sally attends every rehearsal that Lyric calls in preparation for the show.
  • If Sally misses more than one rehearsal, she can be fired and replaced.
  • Sally receives pay for the rehearsals and shows and does not have her own business.

Sally Songstress Classification Analysis:

A. Direction and Control –

1. Lyric requiresSally to comply with detailed instructions about when, where and how she performs.

2. Lyricmay or may not have train Sally.

3. Lyric does set Sally’s work hours.

4. Lyric does establish Sally’s schedule or routine for the work.

5. Lyric may fire Sally for not following a specific instruction.

B. Outside of Usual Course of Business

1. Sally performs work on Lyric’s premises

2. Sally is integrated into Lyric’s operation or company

3. Service performed is related to Lyric’s business—the production of operas.

C. Independently Established

1. Sally only has her own personal phone listing.

2. Sally does not have own business.

3. Sally does not have a financial investment in businessand cannot incur loss for this job.

4. Sallyis using Lyric’s equipment.

5. Sally does not employ others.

6. Sally does not haveindependent liability and worker’s comp.

7. Sally performs service for others but not at the same time.

8. Sally does not set own hours of work.

9. Sally is being paidfor her work as part of the company.

Outcome: Sally Songstress is an Employee

Package Delivery Person – Two Scenarios

Fact Pattern 1 – David Delivery

  • Company hires David to drive a truck for deliveries.
  • Company is in the business of delivering packages.
  • David has his own truck but uses it exclusively for Company’s business.
  • Company tells David where to go, what to wear, and how to deliver the packages

A. Direction and Control –

1. Company requiresDavid to comply with detailed instructions about when, where and how the work is done.

2. Companyhas its own training program.

3. Company does set David’s work hours.

4. Company does establish David’s schedule.

5. Company may fire David for not following a specific instruction.

B. Outside of Usual Course of Business

1. David performs work on Company’s premises where he checks in and gets packages.

2. David is integrated into Company’s operation.

3. The delivery service performed is related to Company’s business

C. Independently Established

1. David does not have his own business phone listing.

2. David does not have own business.

3. David does not have a financial investment in Company’s businessand cannot incur loss for this job.

4. Davidhas his owntruck, but uses Company’s handheld computer to log in packages received and delivered.

5. David does not employ others.

6. David does not have liability and worker’s comp.

7. David does not perform service for others.

8. David does not set own hours of work.

9. David is being paidbi-weekly.

Outcome: David Delivery is an Employee

Fact Pattern 2 – Joe Business

Company franchises delivery routes for package delivery.

Joe Business purchases a route and forms a corporation.

Joe Business owns his own truck(s).

Joe Business

Joe Business Classification Analysis:

A. Direction and Control –

1. Company gives general directions to Joe about timing for delivery of packages, but does not require Joe to comply with detailed instructions about when, where and how the deliveries are made.

2. Company does not train Joe or his workers.

3. Company does not set Joe’s work hours, but only requires delivery completion per their agreement.

4. Company does not establish Joe’s schedule or routine for the work.

5. Company may not fire any workers Joe hires for not following a specific instruction.

B. Outside of Usual Course of Business

1. Joe performs work off Company’s premises

2. Joe’s route is not integrated into Company’s operation. He has exclusive control over that subject to his franchise agreement.

3. Service performed is unrelated to Company’s business

C. Independently Established

1. Joe has own phone listing.

2. Joe is own business.

3. Joe has financial investment in businessand can incur loss.

4. Joe owns own equipment.

5. Joe may employ others.

6. Joe has liability and worker’s comp.

7. Not known if Joe performs service for more than one person at once

8. Joe setsworkers’hours

9. Joe is being paidfor the job by contract.

Outcome: SCI is an Independent Contractor

Fact Pattern 1 – Nurse Cratchett

  • Nursing Specialists supplies in-home nurses and nurses aides.
  • Nursing Specialists does background checks, training, and holds themselves out as “the preeminent in home health care provider.”
  • Nurse Cratchett applies for work and is assigned to care for an elderly patient.
  • The elderly patient pays Nursing Specialists who, in turn, pays Nurse Cratchett.

Nurse Cratchett Classification Analysis:

A. Direction and Control –

1. Nursing Specialists requiresNurse Cratchettto comply with detailed instructions about when, where and how she performs.

2. Nursing Specialists trainsNurse Cratchett.

3. Nursing Specialists does set Nurse Cratchett’s work hours.

4. Nursing Specialists does establish Nurse Cratchett’s schedule or routine for the work.

5. Nursing Specialists may fire Nurse Cratchett for not following a specific instruction.

B. Outside of Usual Course of Business

1. Nurse Cratchett performs work off Nursing Specialists’s premises

2. Nurse Cratchett is integrated into Nursing Specialists’s operation.

3. Service performed is related to Nurse Cratchett’s business—providing health care aids.

C. Independently Established

1. Nurse Cratchett only has her own personal phone listing.

2. Nurse Cratchett does not have own business.

3. Nurse Cratchett does not have a financial investment in businessand cannot incur loss for this job.

4. Nurse Cratchettis using Nursing Specialists’s equipment.

5. Nurse Cratchett does not employ others.

6. Nurse Cratchett does not haveindependent liability and worker’s comp.

7. Nurse Cratchett performs service for Nursing Specialists.

8. Nurse Cratchett does not set own hours of work.

9. Nurse Cratchett is being paidfor her work by Nursing Specialists.

Outcome: Nurse Cratchett is an Employee