Companies Using Contract Labor Get Boost From New NLRB Test (1)

The National Labor Relations Board overturned an Obama-era standard for deciding whether workers are employees protected by federal labor law or independent contractors who are not, giving a boost to companies that prefer to use contract labor.

The legal test for employment status properly accounts for workers’ “entrepreneurial opportunity” for economic gain, which had been severely limited by a 2014 ruling involving FedEx Corp., the Trump-appointed NLRB members said in the board’s 3-1 ruling on Jan. 25.

Many companies use independent contractors in part to avoid the expense and legal liability that comes with employing workers. The ruling has ...