Those doing business in the Badger State should take note — in a recent case, the Wisconsin Court of Appeals determined that delivery drivers who were paid as independent contractors were improperly classified as such.

By way of background, Wisconsin statute uses nine factors to determine if workers are employees for purposes of unemployment insurance tax liability. The company bears the burden to establish at least six of the nine factors are met for individuals to be exempt and for the company to therefore avoid paying unemployment insurance tax on its independent contractors.

In the recent Amazon Logistics, Inc. v. Labor and Industry Review Commission, et al.case, the Wisconsin Court of Appeals analyzed these nine factors in detail. The company, Amazon Logistics, challenged the Department of Workforce Development and Labor and Industry Review Commission’s determinations that its independent delivery drivers qualified as employees.

Amazon Logistics coordinates product delivery via numerous pathways, including a smartphone application, “Amazon Flex,” used by individual drivers. Individual drivers download the app and apply to perform delivery services for the company. As part of the application, drivers sign off on the company’s “Independent Contractor Terms of Service.” Individuals accepted to the Amazon Flex program may then select blocks of time to make deliveries. During such delivery blocks, the drivers pick up packages from the warehouse, scan the packages into the app before loading them into their own vehicle, and then proceed to deliver the packages, indicating completion via the app. The app also provides a suggested delivery route. Individuals are paid when the delivery block is completed.

Amazon Logistics contended these delivery drivers were not employees and did not trigger unemployment insurance taxation. Ultimately, however, the court concluded that the company could only meet five of the nine factors required