Employees vs. Independent Contractors



Here’s an brand-new, interesting little nugget from the U.S. Department of Labor Wage and Hour Division, proposing a new definition of what constitutes an “independent contractor”
under the Fair Labor Standards Act.


The document itself is over 250 pages long and quite dull reading. However, the executive summary contains a few key statements that could potentially have a substantial impact
on WWE’s current employment system.


For example, the new rule states that, “independent contractors are workers who, as a matter of economic reality, are in business for themselves as opposed to being economically
dependent on the potential employer for work.” Further, the summary says that two key factors in determining a worker’s status as an “employee” as opposed to an “independent contractor” are (1) the nature and degree of the worker’s control over the work, and
(2) the worker’s opportunity for profit or loss.


Under the few standards that I listed, how could the average WWE performer possibly be considered an “independent contractor”? They are fully and completely economically dependent
on the WWE under the terms of their contracts; the “nature and degree” of their work is completely controlled to the smallest detail; and their opportunity for profit or loss is “rigidly controlled” by the Company (i.e., being denied even the option of third-party
social networking funds).


I’m sure McDivitt and his associates will be fine-tooth-combing the new rule.  


 Until either a high ranking politician gets on WWE's case about it, or enough people within the company sue to make it worthwhile, nothing will happen to them, sadly.