Whether Minor League Baseball players are exempt from the federal minimum wage law is an issue that mightor might notbe settled by proposed legislation winding its way through Congress. The Save America's Pastime Act (H.R. 5580) would add minor league players as an exception to the federal Fair Labor Standards Act (FLSA).
MiLB expressed its support for the bill in light of a class-action lawsuit challenging whether the players are exempt. The bill was introduced last month by Reps. Brett Guthrie (R-Ky.) and Cheri Bustos (D-Ill.) and was referred to the House Committee on Education and the Workforce.
But last week, Bustos withdrew her support. She said in a statement that she had new information and, "I cannot support legislation that does so at the expense of the players that draw us to stadiums like those in the Quad-Cities and Peoria."
A news release on Guthrie's website argued, "If the law is not clarified, the costs to support local teams would likely increase dramatically and usher in significant cuts across the league, threatening the primary pathway to the majors and putting teams at risk."
The FLSA is a complex law that governs not only minimum wage but other issues such as overtime. It does exempt certain employers, including amusement or recreational establishments and seasonal events, but only under certain circumstancessome of which fit MiLB.
Aside from the issue regarding players pay, much of which is borne by MLB, MiLB team management should review its pay practices to ensure they are in line with all the provisions of the FLSA.
—July 7, 2016
Employee versus independent contractor status requires complicated analysis of many factors. The employer's risk for misclassification can be substantial, as I have written in Legally Speaking (see "Employment law update: two timely topics" in the Spring 2010 issue).
The issue is still alive, perhaps even more so in 2016, as the Internal Revenue Service continues to scrutinize independent contractor relationships. And, as I wrote in the earlier article, overtime becomes an issue as well, further complicating matters and increasing greatly potential financial liability.
The basic rule is whether the employer controls the duties of the individual. If in doubt, the conservative route is to pay the person as an employee. Since my last article, the IRS has instituted the Voluntary Classification Settlement Program, which offers relief from much of the tax liability, interest and penalties for employers who have misclassified employees as independent contractors.
For more details on the subject, the IRS has updated its publication, "Independent Contractor (Self-Employed) or Employee?" I thank Legally Speaking reader Jackson Hille, as content associate for FormSwift, for pointing out the change and for bringing to my attention two articles that he co-wrote on the subject, "The Freelancer's Essential Guide to Business and Taxes" and "A Tax Guide for Independent Contractors and the Companies Who Hire Them".
—March 14, 2016