Jamie works as a makeup artist for several entertainment companies in Atlanta. For the past 3 years, she has provided makeup services for performers at Harmony Productions, a regional performing arts company. Harmony has always classified Jamie as an independent contractor. They do not withhold taxes, provide benefits, or allow her to unionize. Jamie sets her own schedule, brings her own makeup supplies, and works for other clients.
Recently, Jamie learned about the 2023 Atlanta Opera case, where the National Labor Relations Board (NLRB) ruled that makeup artists and other stagehands at the Atlanta Opera should be classified as employees, not independent contractors, making them eligible for unionization. The NLRB applied a new worker-friendly test that emphasized workers' entrepreneurial opportunity and their dependency on the employer.
Jamie and several other makeup artists are now considering challenging their classification at Harmony Productions, believing that they might qualify as employees under the new standards set by the Atlanta Opera case. Harmony insists that Jamie and her colleagues are true independent contractors who have significant control over their work and entrepreneurial opportunities.
Please read this article: Government Scrutiny of Gig Workers Is Misplaced.
Then, please discuss the following with your peers:
What key factors do you believe might determine whether Jamie should be classified as an employee or an independent contractor under the new standard?
What are the potential benefits and risks for gig workers who are reclassified as employees?
What broader implications might the Atlanta Opera case have for the gig economy and labor relations in the United States?
Potential Benefits and Risks for Gig Workers Reclassified as Employees
The reclassification of workers like Jamie from independent contractors to employees carries significant financial and legal implications for both the worker and the company.
Potential Benefits for Reclassified Employees
Financial and Economic Security: Employees gain the right to minimum wage and overtime pay protections under the Fair Labor Standards Act (FLSA).
Benefits and Protections: They become eligible for employer-provided benefits (health insurance, retirement plans) and critical government protections, including Workers' Compensation (for on-the-job injuries) and Unemployment Insurance (if they lose their job).
Collective Bargaining Rights: Under the NLRA (the statute governing the Atlanta Opera case), employees gain the right to unionize and engage in collective bargaining. This is a core motivation for Jamie and her colleagues.
Tax Burden Shift: The employer is required to pay half of the Social Security and Medicare taxes (FICA taxes), relieving the worker of the entire self-employment tax burden.
Potential Risks for Reclassified Employees
Loss of Complete Flexibility: While the Government Scrutiny of Gig Workers Is Misplaced article argues that the promise of gig flexibility is often an illusion, true independent contractors do have maximum freedom. As an employee, Jamie would likely lose some of the control over setting her own schedule and methods, as the employer's need for control is a key factor in the employee determination.
Reduced Overall Income: Some companies may adjust compensation models to offset the increased cost of benefits, payroll taxes, and overtime. If an employer limits an employee's hours to avoid paying overtime or benefits, the worker's take-home income could potentially decrease.
Sample Answer
Key Factors for Classifying Jamie as an Employee or Independent Contractor
The National Labor Relations Board (NLRB) ruling in The Atlanta Opera, Inc. case returned to a multi-factor common-law agency test that minimizes the decisive weight of "entrepreneurial opportunity" and instead requires a holistic, fact-specific assessment of the entire relationship.
For Jamie, the classification challenge will hinge on the following factors derived from the new standard, balancing the facts that support Harmony's claim against those that support