Determining independent contractors: Sometimes the government loses

There’s been an ongoing battle between employers and the U.S. Department of Labor (DOL) over when someone is considered an independent contractor versus an employee. A recent decision from the U.S. 8th Circuit Court of Appeals to reverse summary judgment (dismissal without trial) in favor of the DOL gives employers some guidance and reason for hope.

Background facts

Travelon hires drivers to take patients to and from medical appointments. It provides equipment, such as vans and electronic tablets, to drivers and pays for costs, including internet service and insurance for the vans. Customers pay the company for their transportation services, but Travelon provides the entire payment to the drivers.

Drivers don’t get to keep all the money from a trip, however. They are responsible for paying Travelon weekly expenses, which is how the company generates revenue. These expenses include a dispatch fee, 35% of the commissions generated by their weekly trips, insurance fees, vehicle lease fees, vehicle maintenance fees, and a tablet rental plus added costs for gigabytes of data used.

Travelon's dispatch service assigns trips to drivers through an application on their tablets, which monitor their GPS locationsand their availability. Because drivers set their own schedules (and can change them daily), they’re encouraged to notify dispatch when they’re available to accept trips. When they’re available, dispatch assigns them rides and provides pick up and drop off instructions through the app.