In the decision of the Indiana Supreme Court earlier this year in Q.D.- A., Inc. vs. The Indiana Department of Workforce Development, Supreme Court Case No. 19S-EX-43, the Court gave Indiana companies who use independent contractor truck drivers additional guidance as to how to properly structure independent contract agreements with drivers to hopefully prevent drivers from being reclassified as employees. In the Q.D. – A. case, the company matched drivers with customers who needed large vehicles driven to them. Q.D.- A. classified drivers as independent contractors and did not pay unemployment taxes for them. The Indiana Unemployment Compensation Act presumes the worker is an employee unless the contracting party can show (a) the worker is free from the employer’s control or direction, (b) the worker performs services outside the usual course of the employer’s business, and (c) the worker receives a commission or operates as an independently established trade, occupation or profession.

As to the first prong, direction or control, the contract in question provided that the driver “expressly understood and agreed” that the driver was an independent contractor. The contract also required the driver provide all of its own equipment and gave him control over how to complete the work. The driver was allowed to provide services for any competitor and hire his own subcontractors to complete deliveries. The fact that Q.D.- A. required the driver to follow all applicable law was not a sufficient factor to determine that the employer was controlling the driver. Rather, Indiana determined that it is the state controlling the driver, not the employer. Q.D.- A. gave no guidance to the drivers on how they should perform their work and did not evaluate or monitor them. Tellingly, the driver could also refuse the job with no repercussions.

As to the second prong, performance of services outside usual course of business, because Q.D.- A was a broker and not a trucking company itself with its own driver employees, it passed this test. If, however, Q.D.- A did regularly provide drive away services on its own, it may have failed this test.