The Oakland Raiders cheerleaders might be the group that is the most enthusiastically cheering for the new Labor Code Section 2754. The Raiderettes filed a class action case against the Raiders in 2014 in a fight to win status as employees that would grant them the protection of wage and hour laws. The plaintiffs in the case (cheerleaders/Raiderettes) alleged that, as independent contractors, they received contract pay of $125/game. This rate of pay was provided regardless of how many hours the cheerleaders worked and resulted in less than $5/hour. Minimum wage for California employees at the time of the suit was $8/hour and was since raised to $10/hour.
The Raiderettes are not the only of their kind to feel like they are not being treated fairly on the job. As other professional sports teams’ cheerleaders have filed similar suits, legislature is taking action to address the problem. As of January 1st and in accordance with new Labor Code Section 2754 added by AB 202, cheerleaders for professional sports teams in California will be deemed employees according to state law.
Some wonder if the new legislation could hint at a broader policy against misclassification as independent contractors. Legislative history clearly indicates the apparent concern for the issue of independent contractor classification noting that the Employment Development Department reports for 2012 alone indicated:
$36,348,078 in payroll assessments and
$9,131,000 in tax fraud assessments
(According to the June 24, 2015 Senate Floor Analyses)
The California Division of Fair Labor Standards also agrees that independent contractor classification is a rampant problem – even going so far as to report it as such on their website alongside their concern regarding the lack of a bright-line test.
In fact, the independent contractor classification problem is not one that is limited to California. According to the U.S. Department of Labor Administrator’s Interpretation from July 2015 noted that the misclassification of workers as independent contractors is more and more common in U.S. workplaces. It was also noted that when the economics realities test is combined with the expansive definition of “employ” according to the Fair Labor Standards Act most workers are actually employees – not independent contractors.
If you have questions about your own status as an independent contractor or need information on how to decide if you are actually a misclassified employee, please get in touch with the southern California employment law attorneys at Blumenthal, Nordrehaug & Bhowmik.