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monitors, analyzes and corrects media reporting errors and bias concerning messengers and couriers.


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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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