Frequently employers provide independent contractors with significantly higher rates of pay because they generally do not provide those workers with benefits. Based on this common practice, employers may believe that they will not be held liable for damages if they have misclassified that employee as an independent contractor. However, the Massachusetts Supreme Judicial Court ("SJC") in Somers v. Converged Access, Inc. recently held that no such rule exists under state law. In Somers v. Converged, the plaintiff, Somers, twice applied for full-time employment with the defendant, Converged Access, Inc. ("CAI"), but was not hired. Somers later agreed to work for CAI on a temporary basis as an "independent contractor" at a rate of $65.00 per hour. After CAI terminated his contract, Somers filed suit alleging, among other things, that he had been misclassified as an independent contractor under M.G.L. c. 149, § 148B. The trial judge determined that Somers should have been classified as an employee but that CAI had in fact paid Somers much more than he would have earned in pay and benefits if he had been correctly classified as an employee, and therefore, Somers had suffered no damages. The trial judge granted summary judgment in favor of CAI, and Somers appealed. The SJC determined that the damages incurred by an individual who is misclassified as an independent contractor are "equal [to] the value of wages and benefits he should have received as an employee, but did not." As a result, in this case the SJC held that Somers could retain the pay he received as an independent contractor and also recover the value of any holiday pay, vacation pay and other benefits that he would have been entitled to as an employee. In addition, the SJC in Somers held that unless the employer can show that the misclassified employees were exempt from the overtime requirements of state and federal law, the employees would be entitled to recover overtime based on the hourly rate they received as independent contractors. This remains true, the SJC said, even if there is evidence that demonstrates that the employer would have paid the independent contractors significantly less as employees in comparable positions.
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