2d Utilizes Economic Realties Test To Determine If Corporation Is Employer Under FLSA

Barfield v. NYC Health and Hospitals Corp., ___F.3d___(2d Cir. Aug. 7, 2008), is an important FLSA case. As readers of this blog know, it is often difficult to determine whether or not someone is an employee or independent contractor and there are multiple different tests utilized to determine employee status.

In Barfield, the court utilized one of these tests, the economic realities test, to determine whether Bellevue Hospital was a joint employer. Equally significant is the fact that while the court said it was utilizing the economic realities test, it cited, several times, to the common law right to control test. Though this decision is lengthly and fairly well written, it does not do much to help clarify the law with respect to either employee or employer status.

Indeed, the court described the criteria it was applying as follows:

From this precedent, we conclude that the various factors relied upon by this court
(1) to examine the degree of formal control exercised over a worker, see Carter v. Dutchess
Cmty. Coll., 735 F.2d at 12; (2) to distinguish between independent contractors and
employees, see Brock v. Superior Care, Inc., 840 F.2d at 1058-59; and (3) to assess whether
an entity that lacked formal control nevertheless exercised functional control over a worker,see Zheng v. Liberty Apparel Co., 355 F.3d at 72, state no rigid rule for the identification of
an FLSA employer. To the contrary, as we noted in Zheng, they provide “a nonexclusive and
overlapping set of factors” to ensure that the economic realities test mandated by the
Supreme Court is sufficiently comprehensive and flexible to give proper effect to the broad
language of the FLSA. Id. at 75-76.

There is a lot more to this case than just employment status. The court also reviewed the standard for attorneys fees. FLSA attorneys will want to read this case.

Mitchell H. Rubinstein