Captives Soon to All Be W2 Employees? Jammal Vs American Family

[Gulfman]

Not quite sure I followed everything you said.

The sad reality is, many people who are classified as independent contractors are really employees. The employer simply has too much control and the IC has never made an investment and has no real risk of running a loss.

https://www.irs.gov/businesses/small-businesses-self-employed/independent-contractor-self-employed-or-employee

For an agency with workers, anyone sitting at a desk is almost certainly an employee. Outside people may or may not be an employee, it really just depends on the level of control.

If you tell someone what to do, when to do it and how to do it all while controlling how much they get paid, they are almost certainly your employee under the law.

Big 10-4 to that Vol.

 

[AZDave]

Just a follow up on this.

Following a unanimous advisory jury verdict in April, U.S. District Court Judge Donald Nugent issued a decision last Tuesday, August 1st, stating that American Family Insurance had misclassified agents as independent contractors instead of employees. In addition, the Court denied American Family's request that the class be decertified.

Full press release can be found here:

https://www.wexlerwallace.com/news-post/judge-rules-american-family-insurance-misclassified-agents/

 

[Noble]

I wonder what the implications will be for other companies that operate in a similar way.

 

[AZDave]

The Sixth Circuit Court of Appeals issued its ruling in the Jammal et al. v. American Family case on Tuesday, January 29, 2019. In a 2 to 1 decision, the panel reversed the verdict from the district court and held that American Family had properly classified its agents as independent contractors.

BIG win for the Captives! I stand corrected for my earlier eagerness....was so wishing for that Starbucks gift card.

For those interested, a copy of the decision is here.

 

[shawnmwalker]

HUGE Moment in insurance last week. Thanks for posting AZ Dave! we should all be aware of this!