Maine Employment Lawyer Blog

Many employers in Maine and across the country engage in the practice of misclassifying employees as independent contractors. Misclassification is sometimes called "1099'ing" because of the 1099 tax form independent contractors receive instead of a W-2 form. While misclassification is illegal, it can save employers as much as 30% in payroll and related taxes that they would have to pay if they correctly classified their workers as employees. Employees who are misclassified as independent contractors can miss out on workers compensation insurance, unemployment insurance, fair pay, and other workplace protections.

The National Employment Law Project (NELP) has published a report which identifies the steps various states have taken in the past year to combat the problem of misclassification. The report identifies a new section of Maine's Workers Compensation Act which sets special rules for when employers can classify workers in the trucking and messenger service industries as independent contractors. Under this statute, workers in these industries are presumed to be employees and employers can only classify them as independent contractors if they can satisfy specific criteria. To illustrate, under this statute, if a worker is not covered by his employer's workers compensation insurance, and he does not own or lease the vehicle he uses for work, his employer cannot classify him as an independent contractor.

In addition to legislative action, the NELP report identifies some states that have stepped up enforcement of laws already on the books. For instance, in the past year, Massachusetts' Joint Task Force on the Underground Economy and Employee Misclassification has recovered nearly $6.5 million through its enforcement efforts--which included $2 million in unpaid unemployment insurance taxes. Recently, there have been reports of rising unemployment insurance tax rates in Maine. Increased enforcement actions against employers who misclassify their workers as independent contractors could help eliminate the need to raise these tax rates. If employers who are violating the law are forced to pay the taxes that the law requires them to pay, the rates can be lower for all employers.

If you believe that your employer has misclassified you as an independent contractor, you should contact an experienced employment attorney for advice.

The National Labor Relations Board ("NLRB") has issued a rule requiring most private sector employers to hang a poster up in their workplaces which notifies employees of their rights under the National Labor Relations Act ("NLRA"). Most employers will likely hang these posters amongst the other posters they're already required to hang up in the workplace. Among other things, the poster will inform employees that they have the right to organize a union to negotiate with their employer concerning wages, hours, and other terms and conditions of employment. According to the federal Bureau of Labor Statistics, as of 2010, only 6.9% of private sector employees were unionized. To the extent that low number is attributable to a lack of understanding about the right to unionize, this new NLRB rule could result in more employees forming unions.

Today, Senator Susan Collins (R-ME) and Senator Joseph Lieberman (I-CT) introduced a bill in the U.S. Senate that would extend employment benefits to the same-sex partners of federal employees. Senator Collins explained the reason for introducing the bill as follows: "The federal government must compete with the private sector when it comes to attracting the most qualified, skilled, and dedicated employees. Today, health, medical, and other benefits are a major component of any competitive employment package." If passed, this bill would bring the federal government more in line with the law in Maine, which requires employers to offer certain domestic partnership benefits to qualifying domestic partners.

In Michaud v. Fraser Paper Limited, the Maine Workers' Compensation Board ruled that a 66 year-old mill worker with Reactive Airway Disease from workplace chemical exposure was ineligible for workers' compensation benefits because he accepted an early retirement package that was offered by the mill, despite the fact that his light duty office job was slated for elimination as part of a company-wide downsizing.

Raymond Michaud is a 66 year-old paper mill supervisor from Frenchville. He worked for Fraser Paper Limited in Madawaska for 30 years. In 2000, he suffered a chemical exposure at work that injured his lungs and had a long-term effect on his pulmonary health. He was medically restricted from working in the mill, as he could not be exposed to fumes and dust and could not exert himself. In 2002, the mill gave him a light duty office assignment, which was less than full-time, and which he performed for approximately one year.

In 2003, due to financial difficulties, the mill announced it would lay off 190 employees. Supervisory employees over the age of 55, including Michaud, were given the option to take early retirement, with certain incentives. Michaud accepted the early retirement package, assuming that as an older worker on a less than full-time light duty assignment, his position would be eliminated during layoffs.

Out of work, with permanent lung injuries, Michaud asked the mill to pay weekly workers' compensation benefits. The mill refused, invoking the retiree presumption under the Workers' Compensation Act, which states that an employee who terminates active employment and is receiving retirement benefits is presumed not to have any loss of earnings or earning capacity as a result of his compensable work injury.

The hearing officer found that Michaud had voluntarily retired which put the burden on Michaud to show that he was physically unable, because of his work-related injury, to perform any work suitable to his training and experience. Where Michaud had extensive work restrictions due to his pulmonary condition, but was not totally medically disabled from any job and had been actively working in the office for the last year, the hearing officer found that he had not overcome the presumption of voluntary retirement, and was not entitled to further weekly benefits.

While disappointing for Michaud, the hearing officer's ruling is consistent with the Law Court's opinion in Costales v. SD Warren, which set the standard for rebutting the retiree presumption, and with the legislative intent of Section 223 to limit recovery of workers' compensation and retiree benefits at the same time from the same employer. It was not clear from the opinion whether Michaud would have received any severance pay had he declined to take early retirement and let the mill lay him off in the downsizing. This is an example of a decision that is legally correct, but just feels wrong.

If you have been injured at work, call Adrienne Hansen at the Maine Employee Rights Group for a free telephone consultation at 1-800-490-5218.

In Johnson v. True North Salmon, the Maine Workers' Compensation Board emphasized the importance of performing a good faith work search when seeking 100% partial incapacity benefits under Section 213. A 50 year-old laborer in a fish processing plant, Johnson suffered a repetitive stress injury to his elbow from "pin boning" several hundred fish a day at work. Johnson did not have a high school diploma and had worked in jobs requiring heavy or repetitive use of both hands for his entire life. Prior to his injury, Johnson earned $480 a week at True North Salmon. Subsequently, his doctor diagnosed him with epicondylitis causing swelling and pain and gave him work restrictions of no heavy or repetitive work with his right hand.

Because he could not return to pin boning and the company had no light duty work for him, Johnson asked the Board to award 100% partial incapacity benefits under Section 213. To obtain 100% benefits for only partial incapacity, Johnson had to show, through work search or other vocational evidence, that work was unavailable within his local community as a result of his work injury. Johnson produced evidence of a work search conducted over the course of five months, but the Board declined to award 100% benefits because Johnson listed several employers repeatedly, week after week, most of which were not actually advertising job openings, and he did not use help wanted ads or other employment resources. Instead, the Board found that Johnson could earn $225-250 per week and reduced his benefits accordingly. The Board did take into account Johnson's limitations with respect to the use of his right hand as a result of the work injury, his age, lack of education, lack of experience, training or transferable skills, and the fact that he lives in an isolated geographic area of the State with a poor labor market, finding that these factors, combined with his work injury, made it unlikely that he would be able to find steady, full-time employment. However, the Board felt that Johnson had not met his burden of proof to show that he looked for work in good faith.

This decision emphasizes the importance of a good faith work search for all partially disabled claimants seeking 100% benefits and shows the degree to which the Law Court's decision in Monaghan v. Jordan's Meats influences the hearing officers in their decisions. In Monaghan, the Law Court gave a thorough analysis of the work search rule in workers' compensation cases. The Court explained that whether an injured employee receives total or partial incapacity benefits depends on the extent to which the employee retains the ability to earn incomes after a workplace injury. The employee's post-injury earning capacity is based on both the employee's physical capacity to earn wages, and (2) the availability of work within the employee's physical limitations. An employee who retains some ability to earn may nevertheless be entitled to receive the full amount of workers' compensation benefits, with no deduction for earning capacity, if the persisting effects of the work-related injury prevent the employee from engaging in any regular paying work.

There are three ways in which an injured employee can show entitlement to the full amount of workers' compensation benefits. First, an employee who demonstrates a total physical incapacity, that is, the medically demonstrated lack of the physical ability to earn, can prove entitlement to "total" incapacity benefits pursuant to Section 212 without a showing of any work search or other evidence that work is unavailable.
Second, in limited situations, an employee suffering only partial incapacity to earn may be entitled to total benefits pursuant to Section 212 if the employee can establish both (1) the unavailability of work within the employee's local community, and (2) the physical inability to perform full-time work in the statewide labor market, regardless of availability. Employees who are totally medically disabled under Section 212 are not subject to the 10-year time limit on receiving benefits.

Third, a partially incapacitated employee may be entitled to 100% partial incapacity benefits pursuant to Section 213 based on the combination of a partially incapacitating work injury and the loss of employment opportunities that are attributable to that injury. In order to obtain the 100% benefit, it must be established, pursuant to the "work search rule" that work is unavailable within the employee's local community as a result of the work injury. When the employee is the petitioning party, the employee has the ultimate burden of proof to show that work is unavailable as a result of the work injury within the employee's local community.

When an employee attempts to show the unavailability of work through work search evidence, the work search must be adequate as a matter of law. An adequate work search should disclose that the worker has made a reasonable exploration of the labor market in his community for the kind of work he has regained some ability to perform, and that he was unable to obtain such work for pay, either because no stable market for it existed or, if there was a stable market, the work was not available to him because of his continuing limitations from the work injury which prevented him from doing it. There are a number of factors the Board will consider when deciding whether an employee has proven his entitlement to 100% benefits for a partial injury claim:
(1) The number of inquiries made or applications submitted by an employee

(2) Whether the search was undertaken in good faith

(3) Whether the search was too restrictive

(4) Whether the search was limited solely to employers who were not advertising job openings or whether the employee also made appropriate use of help wanted ads, career center services or other job resources

(5) Whether the search was targeted to work the employee is capable of performing

(6) Whether the employee over-emphasized work restrictions when applying for jobs

(7) Whether the employee engaged in other efforts to find employment or increase prospects for employment such as taking classes or volunteering

(8) The employee's personal characteristics such as age, training, education, and work
history

(9) The size of the job market in the employee's geographic area.

Partnering with Maine Employee Rights Group will give you the best chance of proving there is no work for you in your community as a result of your injury and getting top compensation to help you and your family get by until you get better. If you have been injured at work, call Adrienne Hansen at the Maine Employee Rights Group for a free telephone consultation at 1-800-490-5218.

Glenn Mack, Jr., a muslim man who formerly worked at a Whole Foods grocery store in Philadelphia, is suing the company for religious discrimination. Mr. Mack's troubles with Whole Foods began when he notified management of his intention to take 18 days off from work so that he could go on a pilgrimage to Mecca, Saudi Arabia. Mr. Mack was told that he was not guaranteed his job back when he returned from his pilgrimage. His supervisor told him "you can choose, it's either your job or your religion."

Mr. Mack chose his religion and went on his pilgrimage. Pilgrimages of this kind, called Hajj, are a requirement for all muslim people who are capable of traveling to Mecca.

When Mr. Mack returned from Hajj, Whole Foods demoted him from full-time to part-time status. Co-workers also began to interfere with his prayer time. Prior to his pilgrimage, he had always gone to pray in a secluded area away from customers during the periods of the day when his religion dictated that he pray. Due to interference from co-workers, he resorted to praying outside next to a dumpster.

Mr. Mack complained to human resources about the treatment he experienced when he returned from his pilgrimage and he was restored to full-time status. Three months later Whole Foods fired him allegedly for attendance reasons, however, he had not received any warnings from Whole Foods about his attendance before his termination.

Under state and federal law, employers must provide reasonable accommodations to employees so that they can practice their religion. They also may not discriminate against an employee because of his religion. If you believe your employer is discriminating against you because of your religion or is unreasonably failing to accommodate your religious customs, you should contact the Maine Employee Rights Group to discuss your rights.