What distinguishes a contractor from an employee? The Washington State Supreme Court is deliberating that question now. The decision could have big implications, because businesses increasingly rely on contractors.
No Pay For Overtime
Late at night, long after the grocery superstore Fred Meyer closes, there is still activity in the store. If you look through the windows, janitors are cleaning. But are they employees? Not officially. On paper, they're contractors.
Since 2004, Fred Meyer's janitors have signed their names to documents stating that they're independent contractors. They're not paid hourly. A local janitorial services company pays them a lump sum of around $1,000 every two weeks to work seven nights a week, 364 days a year. Were those janitors actual employees instead of contractors, fair labor laws would entitle them to a minimum wage and overtime pay. They are currently not paid overtime.
The janitors include Caroline Becerra Becerra, Julio Cesar Martinez Martinez, Heriberto Ventura Saturnino, Moises Santos Gonzalez, Orlando Ventura Reyes, Alma A. Becerra and Adelene Mendoza Solario.
Washington State's Court of Appeals found they were employees, an assertion disputed by the companies they served. It doesn't help that legally, it's tricky to distinguish contractors from employees. That's why the state’s high court is weighing in. The courts will examine the definitions and precedents closely.
Legal documents filed on both sides stake out legal territory by describing specific behaviors: whether Fred Meyer may have gotten janitors hired and fired, whether Fred Meyer had control over the janitors' pay, and whether janitors had to prove to a manager that the store was clean before they had permission to leave work.
Layers Of Contractors
A local janitorial company, All Janitorial, hired the janitors. All Janitorial, in turn, contracted with a national janitorial services provider, Expert Janitorial. This multi-layered approach is typical in the janitorial industry, according to expert witness John Ezzo, owner of New Image Building Services, whose testimony was used in the case.
Ezzo said that typically, top-level national janitorial companies don't actually employ janitors. His company is an exception, he said, and suffers from competition with such companies.
The janitors’ lawyers claim the multiple layers of contracts are subterfuge. Those layers, they claim, allows Fred Meyer and Expert Janitorial to avoid fair labor laws. They claim smaller janitorial outfits can fly under the radar.
Fred Meyer and Expert Janitorial have asked the Washington Supreme Court to overturn the appeals court decision, in which both companies were found to be employers of the janitors.