Labor & Employment Law Daily Wrap Up, EMPLOYEE STATUS—D. Ariz.: Economic realities indicated that construction site cleaner was employee, (May 5, 2025)

By Ronald Miller, J.D.

The fact that the cleaner “was able to have other jobs while working [for CCP] does not suggest that [he] had the opportunity for profit” in his relationship with the employer.

A construction site cleaner was entitled to partial summary judgment on ground that he was an employee, not an independent contractor, ruled a federal district court in Arizona. Here, the court found that five of the six indicia of employee status weighed in favor of the plaintiff. The employer controlled how plaintiff performed work, the plaintiff did not have an opportunity for profit or loss depending upon his managerial skill, the employer provided all necessary materials, the work did not require any special skill, and his services were integral to the employer’s business (Santiago v. Construction Cleaning Pros AZ, LLC, No. CV-23-01511-PHX-KML (D. Ariz. May 2, 2025)).

Construction clean-up. The employer operated a construction cleaning business. The plaintiff worked as a cleaner. The employer would text the plaintiff to offer work for the day and he would accept or decline. On the days that he worked the employer would drop him off at a job site with cleaning supplies and would “periodically stop at project sites to check in” on his progress. If the plaintiff’s work was not up to the employer’s standards, he was required to re-do it.

The parties agreed that the plaintiff would be paid $150 per day in cash, which was paid at the end of the day after the work was satisfactorily completed. But on occasion, he was not paid until after the “overall project” was completed.

Independent contractor versus employee. The last week the plaintiff worked for the employer, it refused to pay him because it said his work was not satisfactorily completed. The plaintiff then brought suit alleging that the employer’s refusal to pay him violated the FLSA, the Arizona Minimum Wage Act, and the Arizona Wage Act. Following discovery, the plaintiff moved for partial summary judgment, claiming that the employer misclassified him as an independent contractor and that he was instead an employee under the FLSA.

The employer countered that there was a dispute of fact as to whether the plaintiff was an employee, and it also claimed that it was not covered by the FLSA.

Finding no genuine dispute as to any material fact regarding the plaintiff’s employee status, the court granted his motion for partial summary judgment.

Employee status. Determining whether an individual qualifies as an employee or an independent contractor depends upon “[e]conomic realities, not contractual labels.” The Ninth Circuit has identified factors distinguishing employees from independent contractors, including: (1) the degree of the employer’s right to control the manner in which the work is performed; (2) the employee’s opportunity for profit or loss depending upon his managerial skill; (3) the employee’s investment in equipment or materials required for his task, or employment of helpers; (4) whether the employee’s services require special skill; (5) the degree of permanence of the working relationship; and (6) whether the service rendered is an integral part of the employer’s business.

Right to control. The first factor evaluates the employer’s right to control the manner in which an employee worked. “The extent of the employer’s right to control the means and manner of the worker’s performance is a primary factor.” Here, the employer alleged it “rarely, if ever, directed, instructed, supervised or controlled the manner or means in which [the cleaner] performed construction cleaning services.” However, it determined the location and scope of his work, set standards for his work, “periodically stop[ped] at project sites to check in” on his progress and “routinely” stopped by project sites during his lunch break, received reports of the work completed, inspected his work on completion, and required the plaintiff to re-do his work if it was not up to standards.

Profit/loss opportunities. The second factor assesses the employee’s opportunity for profit or loss depending upon his managerial skill. Here, the plaintiff did not exercise any managerial skill and only completed a “detailed construction clean” of areas the employer assigned him for a daily flat rate. Although the plaintiff could decline to work for the employer on a particular day, his “ability to increase [his] profits... [was] limited” because his “pay [was] capped by what [CCP was] willing to pay [him].”

This factor “focuses on the relationship between the alleged employer and the alleged employee,” analyzing the plaintiff’s opportunity to maximize profits through managerial skill as he performed work for the employer, not his freedom to work for other employers. The fact that the plaintiff “was able to have other jobs while working [for CCP] does not suggest that [he] had the opportunity for profit” in his relationship with the employer. Accordingly, this factor weighed in the plaintiff’s favor.

Investment in equipment or materials. The third factor evaluated an employee’s investment in equipment or materials required for his task, or employment of helpers. An employer’s greater investment in equipment and materials compared to the employee’s is “probative of the workers’ economic dependence on the person who supplies the equipment or facilities.”

In this instance, the employer did not dispute that it provided the plaintiff with all materials necessary for his work. Moreover, contrary to the employer’s contention, this factor was not limited to factory workers. Consequently, this factor weighed in favor of the plaintiff.

Special skill. The fourth factor evaluated the level of “special skill” needed to perform the service rendered. Here, the plaintiff performed manual labor, “deep clean[ing]” construction sites. Thus, contrary to the employer’s contention, the plaintiff’s work did not require some skill. Accordingly, this factor weighed in favor of the plaintiff.

Duration of employment. The fifth factor assesses the permanence of the working relationship. Here, the parties disputed whether the plaintiff maintained an ongoing working relationship with the employer. Here, the plaintiff worked on a job-by-job basis. After receiving a text from the employer, the plaintiff could accept or decline work. On at least one occasion, he declined work because he had other work on that particular day. Thus, this factor cut against the plaintiff and weighed in favor of the employer.

Necessity of services. The final factor considered whether the worker’s services were integral to the business. The employer is a construction cleaning business, and the plaintiff performed construction cleaning on its behalf. Because the parties agreed that the plaintiff provided services integral to the employer’s business, this factor weighed in the plaintiff’s favor.

Accordingly, the court concluded that the relationship between the parties was more akin to employment than to an independent contracting arrangement.

The case is No. CV-23-01511-PHX-KML.

Judge: Lanham, K.

Attorneys: Christopher Jacob Bendau (Law Offices of Christopher Jacob Bendau) for Demetrio Santiago. Stephen William Tully (Tully Bailey) for Construction Cleaning Pros AZ, LLC.

Companies: Construction Cleaning Pros AZ, LLC

Cases: EmployeeStatus WageHour CoverageLiability ArizonaNews