Independent Contractor UPDATE by Jerry Pigsley

On February 10, the Nebraska Court of Appeals affirmed a Dawson County District Court jury verdict that the plaintiff was not an employee, but an independent contractor, of a construction company.  Mejia v. Chapman, Case No. A-13-1015 (Neb. Ct. App. Feb. 10, 2015).  Mejia filed a complaint in District Court alleging he was owed over $150,000 in wages under the Nebraska Wage Payment and Collection Act plus interest, costs and attorney fees.  Chapman denied the allegations in Mejia’s complaint and alleged Mejia was an independent contractor and not an employee.  The Court of Appeals found Chapman set the rate of pay, Mejia was paid by the hour, Mejia arranged the timing and form of the payments he received, Chapman did not pay any federal or state withholding taxes for Mejia, Chapman sent 1099 forms out to subcontractors, including Mejia, and Chapman’s accountant testified that Chapman uses subcontractors and that Chapman told him he was paying Mejia cash as a subcontractor.  This decision reminds construction contractors of the factors used in determining whether a worker is an employee or an independent contractor.  In this case, the jury was not given the right instruction as to who is an “employee” under the Nebraska Wage Payment and Collection Act to the construction company’s benefit.  The verdict likely may have been different if the more restrictive “ABC” test required under state law had been applied instead of the 10 factor common law test used in this case.                   By Jerry Pigsley, Chapter General Counsel