A 9th Circuit District Court recently held that insurance sales agents are independent contractors exempt from FLSA. Summary judgment granted to Allstate.
In determining whether a worker is an employee or independent contractor, a Court must consider the control and financial responsibilities present in the situation. Several factors must be reviewed, including:
1. the degree of the alleged employer’s right to control the manner in which the 2. work is to be performed;
3. the alleged employee’s opportunity for profit or loss depending upon his 4. managerial skill;
5. the alleged employee’s investment in equipment or materials required for his 6. task, or his employment of helpers;
7. whether the service rendered requires a special skill;
8. the degree of permanence of the working relationship; and 9. whether the service rendered is an integral part of the alleged employer’s business.
Neither the presence nor the absence of any individual factor is determinative. Further, because each situation is reviewed on a case-by-case basis, that district courts within the 9th Circuit previously found Allstate’s insurance sales agents to be independent contractors was considered irrelevant by this district court.
In the present case, Allstate controlled the insurance sales agents’ hours, products, and prices, as well as provided insurance forms, training, start-up costs, and other assistance.
However, because Allstate’s insurance sales agents were responsible for how much profit or loss they sustained, whether to employ assistants, and how much to spend on advertising and other areas of their business, the 9th Circuit district court held the insurance sales agents were independent contractors. The district court noted that the present relationship Allstate had with its insurance sales agent involved enough freedom and autonomy that an agent can choose to turn his one-man shop into a multi-agent, multi-office business. The agent could also choose to operate on his own. Either way, the agent had a transferrable interest in the business, a circumstance unheard of in a normal employee-employer relationship.
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