In an off-beat case that revolved around the IRS twenty-factor test for independent contractor, an appellate court in Missouri has affirmed the state Labor Commission ruling that caretakers working for a pet sitting company were statutory employees, rather than independent contractors. The case is entitled 417 Pet Sitting LLC v. Division of Employment Security, and issued from the Missouri Court of Appeals, Western District.
The Court affirmed the Missouri Labor and Industrial Relations Commission when it analyzed the twenty factors, found that nineteen (19) had some bearing on the determination and found that thirteen (13) of those nineteen factors militated a finding of employee status. Five factors favored independent contractor status and one was neutral. The Court opined that “in light of the numerous factors indicative of an employer-employee relationship, Pet Sitting has failed to sustain its burden to prove that its sitters were independent contractors under the common law right to control test.”
The Court observed that there was control and direction exercised by the Company as it could counsel these workers when they received complaints from Company clients. The sitters also were denied the right to assign their jobs to third parties. The Court found that those circumstances were “particularly demonstrative of an employer-employee relationship.” The Company could also dismiss the sitters for noncompliance and the Company was also very “dependent” on these sitters providing their services. The Court differed from the Commission in finding that the payment of sitter business/travel expenses actually favored independent contractor status.
The Court also found that the setting of established hours did not favor an employment relationship but rather was neutral. The Court did not find a need to analyze every one of the twenty IRS factors. Interestingly, the vote in the Labor Commission was 2-1 for employee status.
The IRS test usually provides employers with a better opportunity for success simply because there are more factors where the employer might find a positive reception. What happened here is that the control factors seemed to be the place where the case was lost, although I wonder if these pet sitters had other “clients” of theirs, on their own. Interestingly, employers fare well, as a rule, on the control (or lack thereof) factors and founder on the “independent business” side of the ledger. Another factor was that the work of these people was clearly “integral” to the business of the putative employer.
That’s always a bad sign…