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Are Your “Independent” Golf Caddies Employees?

[September 5, 2013]  Golf clubs that hire caddies to assist their members frequently categorize these caddies as independent contractors rather than employees.  In this regard, caddies are often free to set their own work schedules and to work for multiple golf clubs at the same time.

However, golf clubs should be cautious in treating caddies as independent contractors.  Massachusetts law makes it risky for golf clubs to classify caddies as independent contractors, and other states’ laws may present similar challenges.

Misclassifying caddies as independent contractors may have significant consequences.  For example, a golf club may be held liable for failing to pay required minimum wages, overtime, and workers’ compensation and unemployment insurance premiums.  This can be particularly costly for golf clubs in Massachusetts, in light of the mandatory triple damages and attorneys’ fees awarded to prevailing plaintiffs under the Massachusetts Wage Act.

Massachusetts

Under the Massachusetts independent-contractor statute, an individual performing services for an employer is deemed an employee unless all of the following criteria are met:

  • The individual is free from control and direction by the employer in connection with his or her services;
  • The services are performed outside of the employer’s usual course of business; and
  • The individual is customarily engaged in an independently established trade, occupation, profession or business of the same nature as that involved in the services at issue.

A golf club may meet the first prong of this test by showing that it does not control the manner in which caddies perform their services – for instance, by demonstrating that caddies determine their work schedules and attire.  Similarly, if a golf club’s caddies also regularly work for other golf clubs, then the third prong of the test also may be satisfied.

However, it is unlikely that a golf club could meet the second prong of the test – i.e., that the caddies’ services are performed outside of the club’s usual course of business.  Although the term “usual course of business” is not defined in the statute, a court may reasonably conclude that assisting golfers – the role of caddies – is a function falling within a golf club’s “usual course of business.”

While Massachusetts courts have not yet ruled on this issue, cases in analogous contexts would appear to support such a conclusion.  For example, the courts have ruled that “exotic” dancers are required to be classified as employees because their services fall within their nightclubs’ usual course of business – i.e., providing adult entertainment – even when the dancers set their own schedules and are compensated only through club patrons’ tips, an arrangement not uncommon for golf caddies.

Other States

Most states have less stringent independent-contractor laws than Massachusetts.  In a few of those states, courts have considered the work status of golf caddies.  Those court decisions are fact-specific, focusing on whether the caddies were primarily directed and controlled by the golf clubs or by the individual golfers whom the caddies assisted.

Specifically, courts have considered such factors as whether the golf club required the caddie to wear a uniform; whether the caddie was paid directly by golfers or by the golf club; whether the caddie had to adhere to a set work schedule or was free to establish his or her own schedule; and whether the golf club assigned caddies to particular golfers.  In general, these cases indicate that the greater the level of control a golf club imposes over a caddie, the more likely an employment relationship will be found.

In a California case involving a caddie’s eligibility for workers’ compensation benefits, the court concluded that an employment relationship existed because, among other factors, the golf club oversaw its caddies’ dress and behavior, dictated their assignments and the types of services they rendered, kept track of the caddies’ attendance, and controlled the payment process.  By contrast, in a case involving eligibility for unemployment benefits, another California court held that a caddie was an independent contractor because the caddie performed services at the exclusive direction of the player.

In North Carolina, a court concluded that a golf club was not liable for an injury caused by a caddie because the caddie was not an employee of the golf club.  The court noted that while the golf club provided a “caddie house” and employed a caddie master to oversee its caddies, the caddies were paid directly by the members, received no compensation from the golf club, and were free to decide when to report to work and when to leave.

These cases illustrate that in states with less restrictive independent-contractor laws than Massachusetts, whether a golf club may classify caddies as independent contractors will depend on the specific facts of the case.

Recommendations For Employers

We encourage golf clubs in Massachusetts and other states to take appropriate steps to ensure that they are classifying their caddies correctly.  In particular:

  • Because the classification of workers as independent contractors requires a fact-specific analysis, and because misclassification can expose employers to significant liability, golf clubs should consult with experienced labor and employment counsel in making any such decision;
  • Given the strict requirements of the Massachusetts independent-contractor law, and the costly consequences of violating it, golf clubs in the Commonwealth should give careful consideration to classifying their caddies as employees;
  • In states with less stringent legal requirements, golf clubs should nonetheless ensure that those requirements have been satisfied before classifying caddies as independent contractors, as there are often competing factors that must be carefully taken into account; and
  • When it is determined that caddies may be properly classified as independent contractors, golf clubs should formalize those arrangements in written independent-contractor agreements.  Please bear in mind, though, that if a golf club misclassifies its caddies as independent contractors, then the written agreements may be ruled invalid.

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If you have questions about appropriately classifying caddies or other workers, or would like guidance in connection with any other wage-and-hour issues, please don’t hesitate to contact us.