Mary Kay Misclassification Lawsuit

Mary Kay beauty consultants and sales directors in New Jersey recently filed a class action lawsuit against Mary Kay, claiming that the company has misclassified them as independent contractors rather than employees, in violation of the New Jersey Wage Payment Law.

In Massachusetts, Mary Kay representatives may be misclassified. Massachusetts law makes it difficult for an employer to lawfully classify a worker as an independent contractor. A worker can only be classified as an independent contractor if the employer can prove all three of the following prongs of the independent contractor test:

A. That the worker is not subject to the employer’s direction and control;
B. That the worker does not provide the same type of service to the employer that the employer provides to the general public; and
C. That the worker operates an independent business of the same nature as the work he or she provides to the employer.

Depending on the facts, Mary Kay representatives in Massachusetts may be subject to the direction and control of the company, under Prong A above. Not only do beauty consultants receive job training from the company, but Mary Kay may also require them to purchase fixed amounts of products from the company, and to purchase various pamphlets and other marketing materials directly from the company. Beauty consultants may also be required to purchase and wear uniforms from the company. These facts supports the position that beauty representatives are, in fact, employees, rather than independent contractors.

In addition, Mary Kay may have difficulty establishing Prong B above. Mary Kay Cosmetics holds itself out as providing beauty products and services to the general public. Mary Kay beauty consultants also provide beauty products and services to the general public. Thus, Mary Kay may not be able to prove that its representatives provide services of a different nature than those Mary Kay provides to the general public, and, therefore, under the law Mary Kay representatives would be employees.

Finally, under Prong C, Mary Kay would have to prove that its beauty consultants provide the same type of service that they provide for Mary Kay (selling beauty products and providing makeup services to the public) independently of their work for Mary Kay. Thus, if a Mary Kay representative works full time for Mary Kay and has no other job, she may be misclassified. Or, if the representative has another job, but it is in a different industry, she also may be misclassified.

A business must prove all three of the above “prongs” to lawfully classify workers as independent contractors; if they fail on even just one of the prongs, they are in violation of the law.

Even if a beauty consultant signed an employment contract with Mary Kay that classifies her as an independent contractor, Mary Kay may still be in violation of the law. An employer cannot make an employee an independent contractor just by requiring her to sign such a contract. What matters under the law is whether the three requirements of the independent contractor test have been met, regardless of what the employment contract and agreement states.

If an employer is found to have misclassified workers, the employer is liable for damages. This means that the employer is required to pay the misclassified employees the wages they would have received had they been properly classified as employees. This usually involves compensation for expenses of the company borne by the employer.

If you believe you have been misclassified as an independent contractor, feel free to contact us to confidentially discuss your situation and your rights with one of our employment law attorneys.

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