MCAA Portrays Child Labour as Positive
Business Practice
In a shocking article from the
official publication of the Messenger Courier Association of the
Americas (MCAA) child labour is portrayed as a positive business
practice. The MCAA is the courier industry organization representing
courier company owners. The article is written by a lawyer for
Contractor Management Services, a company similar to NICA, which helps employers to
disguise their employees as independent contractors.
The MCAA refers to the employment of child labour and exploitation of
children as merely using "young
entrepreneurs" and "enterprising
young men" as independent contractors. These "young men" were as young as 10 years
old, forced to work all night and often robbed.
Messenger boys (and girls) were the poster children for child labor in
North America. Western Union alone was the single largest employer of
child labour in America. Messenger companies shamefully exerted a
tremendous level of control over these young boys and girls yet they
still were able to claim them as independent contractors.
In response to the exploitation of children by messenger companies and
others, the National Child Labor Committee was organized in 1904 and
was chartered by Congress in 1907. Photographer Louis
Hine documented many violations of child labour laws in the
messenger industry. As a result of his pictures the many states passed
laws banning the employment of under age children culminating in the
Fair Labor Standards Act, (aka the Federal Wage and Hour Law).
Companies fought the law all the way to the Supreme Court, which upheld
the law and declared the Act constitutional in 1941.
The messenger industry's practice of disguising employees as
independent contractors over the past 150 years not only resulted in
the worst cases of child labour but it also resulted in the
exploitation of most its adult workers too.
Child
Labour in the messenger industry:
Toronto Messenger Boys’
Association Plan to Petition Hepburn for Protection - Toronto Star,
October 13, 1937
Plea For Boys in Large
Cities - Toronto Star, August 13, 1904
More:
Disguised Employees
The Decline of the Messenger Industry
Independent
contracting: One Size Does Not Fit All
Messenger Courier World Magazine (MCAA publication), Spring 2005
By Richard Flaaen
The use of independent
contractors in the courier industry in not new. Throughout the 19th
century, telegraph companies used boys to deliver messages. These young
entrepreneurs would
sit outside a telegraph office for hours, passing the time playing
cards, pitching coins or otherwise occupying themselves, waiting for
the telegraph operator to come out with a message.
Typically, the pay for these early couriers was based on the generosity
of the message’s recipient. These enterprising
young men soon figured out they received a larger tip for good
news if they waited until after the message was opened, and a larger
tip for bad news if they got the tip before the message was opened.
(Perhaps this had a direct impact on the development of stronger glues
in the 1880’s.) Who was offered the message for delivery may have been
determined by who had been waiting the longest, or who was the largest
one there, or who paid the telegraph operator the largest kick-back
from the tip received for delivering the last message. These early
couriers were not considered employees of the telegraph companies; they
were their own bosses.
While much has changed
over the past 150 years, the use of independent contractors in the
courier/messenger industry is still prevalent. The use of
independent contractors allows companies to free up capital that would
otherwise be tied up in the equipment, tools and supplies which the
independent contractors maintain, to save on employee payroll related
costs that are not required for independent contractors, and to avoid
the need to constantly expand (hire) and contract (layoff) a workforce
in response to the changing demands of the courier industry, to name
only a few of the benefits. However, as almost every company involved
in the courier industry knows, the use of independent contractors is
under constant attack from various state and federal regulatory
agencies. And, the only certitude among all the various rules,
regulations, opinions and court decisions applicable to independent
contractors is confusion.
Researching the requirements of the various federal and state
regulatory agencies can be very frustrating. (I keep migraine strength
pain relievers within easy reach when conducting my research.) Two
states can adopt the exact same language applicable to independent
contractor situations, yet the opinions of the courts and regulatory
agencies in one state can contradict the courts and regulators in the
other state. A case in point is the application of the (infamous) “ABC”
test to unemployment benefit claims. For those who are unfamiliar with
the ABC test, it provides that in order to qualify as an independent
contractor the person (driver in the courier industry) (A) must be free
from control and direction in performing the services, (B) must perform
the services either outside the company’s usual course of business or
outside all the company’s places of business, and (C) must carry on an
independently established trade, occupation, profession or business.
All three must be met in order to qualify as an independent contractor.
In one state, the courts, interpreting the “C” factor of the test, have
determined that a driver who relies on another entity to obtain and
provide delivery opportunities is not engaged in an independently
established trade, occupation, profession or business because the
driver is not obtaining the delivery opportunities directly from
customers.
However, in the other state, the unemployment agency and the courts
recognize that the business of obtaining and procuring delivery orders
can be a different and independent business from actually making
deliveries. The language of the “C” test in both states is exactly the
same, but two different results are reached. Different jurisdictions
applying the same test and reaching different results is not limited to
the ABC test.
The state agency responsible for unemployment benefits for a large
western state, which relies on the common law test, has recently
announced in seminars that merely relaying a customer’s required
delivery times to a driver is an exercise of direction and control by
the company procuring the delivery order. A more enlightened state
court in another jurisdiction has opined that merely relaying a
customer’s requirements is not direction and control by the procuring
company. Rather, it is direction by the customer as to the general
requirements of completing a service and no customer should be denied
that right.
If the various jurisdictions cannot agree on a single, uniformed test,
and if states that use the same test cannot agree on a uniform
application of the same test, how can one single approach to utilizing
independent contractors work in all jurisdictions?
The “one size fits all” approach to using independent contractors in
the courier, or any other, industry is an illusion. First, there is no
single, uniform test used by all the various state and federal agencies
that handle independent contractor issues. And second, even when the
exact same test, utilizing the exact same language, is used by two
different states, each state’s courts and agencies may interpret the
same test so differently that an independent contractor situation
acceptable in one state is not be acceptable in the other. If the
various jurisdictions cannot agree on a single, uniformed test, and if
states that use the same test cannot agree on a uniform application of
the same test, how can one single approach to utilizing independent
contractors work in all jurisdictions?
Companies using the services of independent contractors need to make
certain their operations are tailored to each jurisdiction in which
they use independent contractors. What would be acceptable in
Pennsylvania may not be acceptable in New Jersey, and what would be
acceptable in New Jersey may not be acceptable in Maryland. The worse
that usually happens when trying a product advertised as “one size fits
all” is typically some embarrassment when the claims of the infomercial
turn out to be less than truthful. The consequences of using a “one
size fits all” approach with independent contractors, which does not
fit the needs of the jurisdiction in which the independent contractors
are being utilized, can be financially disastrous.
The use of independent
contractors in the courier industry was legal over a century ago
and is still legal today, if done the right way. However, just as the
courier industry has become more sophisticated, advanced and complex
since the post-Civil War era, so have the issues and regulations
regarding the use of independent contractors in the industry. Companies
that do not keep up with changes in the requirements, regulations and
interpretations applicable to independent contractors, either by
themselves or by retaining someone else to do it for them, run a
substantial risk of having a court or agency declare the independent
contractors are employees of the company. A constant vigil is necessary
to protect and maintain the independent contractor status of drivers in
the courier industry.
Richard Flaaen is General
Counsel for Contractor Management Services, LLC
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