Massachusetts W2 vs. 1099 Healthcare Staffing Laws
Massachusetts has been widely recognized as a national leader in healthcare, given the number of healthcare facilities and providers in the state and its effort to improve medical access. However, the ability to deliver effective healthcare hinges on the ability to properly staff facilities, which is even more challenging during workforce shortages.
Healthcare facilities have relied on staffing agencies to fill the gap, but there are important legal factors to consider when bringing in outside staff, especially nursing professionals. In Massachusetts, W2 vs. 1099 classifications have come under greater scrutiny, with the state’s Supreme Court even recognizing worker misclassifications as a “serious problem.”
Here’s a look at Massachusetts independent contractor laws and how they can impact the operation of healthcare facilities that rely on staffing agencies.
Massachusetts W2 vs. 1099 Laws at a Glance
This chart provides a helpful overview of independent contractor law in Massachusetts, with links to key statutes, court cases, and other state resources for further research.
|Statute(s)||Massachusetts General Laws, Part I, Title XXI, Chapter 149 (Labor and Industries)|
|Test||Section 148B: Anyone performing a service is considered to be an employee unless they meet all three of the criteria below:
*The Massachusetts W2 vs. 1099 test is commonly referred to as the “ABC Test” among various states that use it.
|Enforcement||Section 2: Laws relating to employee misclassification are enforced by the Massachusetts Attorney General.
Section 3: The state Attorney General is required to conduct regular and systematic inspections and investigations of all places of employment.
Section 150: The state Attorney General is authorized to file complaints or indictments related to employee misclassification.
|Penalties and Damages||Entities that violate Massachusetts independent contractor laws can face a wide range of damages that include payment of lost wages, benefits, fines, and tax penalties, among other damages.
Reuter v. City of Methuen (2022): Employers are held strictly liable for any late payment of wages or benefits.
Section 150: An employee who prevails in a misclassification lawsuit can also recover treble damages for any lost wages or benefits, as well as litigation costs, and reasonable attorneys’ fees.
Somers v. Converged Access, Inc. (2009): Damages for misclassification aren’t measured by how much the worker was paid as an independent contractor compared to what the worker could have received as an employee. The worker’s contract rate is the wage rate and the worker’s damages are equal to the value of the wages and benefits that should have been provided.
Section 148B(d): Misclassification of an employee is subject to criminal and civil remedies. Liability for violations can extend to the president and treasurer of the corporation and any other entity or agent who manages the corporation.
Massachusetts W2 vs. 1099 Laws: Background
Prior to 1990, Massachusetts applied a common law test to determine whether an employee relationship existed. The test analyzed a broad range of factors, some of which included the worker’s investment in the business facility, the permanency of the relationship, and the skill required in the work.
In 1990, the state replaced the common law test with a statute. This law was changed over the years and in 2004 an amendment was put in place that established the Massachusetts independent contractor test described above.
Massachusetts Independent Contractor Test and Healthcare Facilities
As healthcare facility operators in Massachusetts rely on outside agencies for staffing support, they should also consider ways to limit their exposure to liability under Massachusetts law. One important factor to consider is the business model of their staffing partner. While some agencies use 1099 nurse contractors, others use W2 nurses, taking on the role and responsibilities of an employer for their nurse professionals.
Under the 1099 model, where no employer is identified for a nurse worker, a facility can face greater risk of being classified as the employer of record. The first part of the Massachusetts independent contractor test requires a nurse to be free from any control or direction when working in a facility with patients, but this isn’t always realistic in a patient care setting. For instance:
- Due to nurse patient ratios or the risk of patient abandonment, a 1099 nurse may be directed to stay on shift until another nurse is available to replace them.
- As part of their state certification, 1099 nurse aides may be required to work under the direct supervision and control of facility LPNs or RNs.
- Facilities may require 1099 nurses to take additional on-site training to ensure proper care of patients.
These are just a few areas where healthcare facilities can face increased risk of being deemed the employer of record and face increased legal exposure for misclassification. With strict liability and treble damages in Massachusetts, the costs of getting it wrong can be high, so facilities should approach their staffing decisions with care.
Massachusetts W2 vs. 1099 Nurse Staffing: What’s Best for Your Facility?
The increasing demand for services and decreasing availability of nurses have made it difficult to fill shifts without taking on outside staffing. Find out how you can better protect your facility with a partner that has a range of staffing solutions and can help you fill shifts with W2 nurses today.
Legal Disclaimer: This article contains general legal information, but it is not intended to constitute professional legal advice for any particular situation and should not be relied on as professional legal advice. Any references to the law may not be current, as laws regularly change through updates in legislation, regulation, and case law at the federal and state level. Nothing in this article should be interpreted as creating an attorney-client relationship. If you have legal questions, you should seek the advice of an attorney licensed to practice in your jurisdiction.