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  • New California Law Recognizes Cheerleaders as Employees Not Independent Contractors

    Amid recent review of employees being misclassified as independent contractors, which may not entitle them to overtime, sick days and other protections, California governor Jerry Brown signed a bill into law requiring that any cheerleader who works for a professional sports team in the state receive minimum wage and other benefits.

    The bill, AB 202, removes the cheerleaders as independent contractors and instead recognizes them as employees, which entitles them to the labor protections available to team staff. AB 202 was introduced after the Oakland Raiders were sued by 90 cheerleaders for unfair labor practices. The suit was settled for $1.25 million. The cheerleaders claimed that they were treated like employees, with many hours of practice required for their dance routines and performances throughout the year.

    Interestingly, California’s minimum wage is $9 per hour, and the lawsuit alleges that the team’s cheerleaders were paid $1,250 per season, or about $5 an hour. Unfortunately, although independent contracting relationships can be advantageous and preferred by workers and businesses, some employees may be intentionally misclassified as a means of cutting costs.

    Misclassification of workers has become a hot topic recently and knowing the difference between an employee and an independent contractor can be difficult. As a result, the Department of Labor (“DOL”) has issued new guidance on the topic. Ultimately, the DOL stated that the key inquiry is whether a worker is economically dependent on the employer, thereby making the worker an employee, versus whether the worker is truly in business for him or herself and thus, an independent contractor. Moreover, under the DOL’s broad guidance, more workers are classified as employees rather than independent contractors.

    AB 202, which takes effect on January 1, 2016, applies to cheerleaders working with all professional teams based in California, at both the major league and minor league levels. However, it does not apply to performers who appear once per year or are not affiliated with a team.

    The DOL’s guidance, however, has far more reaching implications. Employers who utilize independent contractors in any type of business are advised to carefully review the DOL’s guidelines or seek immediate advice from counsel to determine whether they truly meet the restricted definition of independent contractors. As demonstrated in the suit discussed above, misclassifications can be very expensive and can also lead to highly publicized lawsuits.

    If you or your institution has any questions or concerns regarding employment related issues, please email Cynthia A. Augello at caugello@cullenanddykman.com or call her at (516) 357-3753.

    A special thank you to Lauren Dwarika, a law clerk at Cullen and Dykman LLP, for her assistance with this blog post.