For the past several years, the International Association of Field Service Technicians (IAFST) has been quietly putting into play a series of white papers pertaining to the Mortgage Field Services Industry. And now that the verdict is in on Vazquez v Jan-Pro, the reality is that the Industry is imploding. For the first time in recent memory, members of the National Association of Mortgage Field Services (NAMFS) risk losing control. The U.S. 9th Circuit Court of Appeals ruled that the California Supreme Court’s landmark 2018 Dynamex decision, which makes it harder for businesses to classify their workers as independent contractors, applies retroactively to a class-action case against cleaning giant Jan-Pro.
“First, Jan-Pro’s business ultimately depends on someone performing the cleaning,” District Judge Frederic Block wrote. “That work is performed solely by the unit franchisees. … Second, Jan-Pro earns a percentage of the payment that customers pay for cleaning services. Thus … Jan-Pro is not indifferent to how much work unit franchisees do or how well they perform that work.”
That really, really needs to sink in, for just a moment. The parallels with respect to our Industry and this case are startling. Janitorial work is the linchpin. As the Honorable Block expounded upon, Jan-Pro was completely dependent upon their network of misclassified employees. And as Block continued, Jan-Pro had an incentive to issue all the work they could and to ensure that the work was performed well. NAMFS members make zero dollars if no one works and further, NAMFS members utilize specific scorecards to determine how well misclassified employees are performing. NAMFS members tie directly pay as well as volume to that scorecard.
Whether or not Dynamex; whether or not the ABC Test will become law of the land is a foregone conclusion. Dynamex merely reaffirmed the ABC Test. And whether or not Dynamex will roll out across high tax states is a done deal, in my opinion, as well. Foreclosurepedia’s Editor-in-Chief, Paul Williams, made that clear in the now famous White Paper written for the IAFST nearly a year ago and available here. To that point, though, we do not look at the latest federal ratification of Dynamex as a large issue.
The IAFST suggested a three prong approach to address Dynamex going back several years. First, IAFST stated that all of its Membership must obtain a Dunn & Bradstreet number, commonly referred to as a Data Universal Numbering System (DUNS). Second, IAFST required its Membership to obtain a System for Award Management (SAM) account from the US Government. This account not only allows for users to competitively compete for US Government contracts, it also performs background checks, verifies citizenship, verifies financial solubility, and a plethora of other vital company related affirmations. Both of these are free, although due to their complexity, many firms hire the process out to Foreclosurepedia. Finally, IAFST requires vocational and educational aptitude testing and training. As a third party service provider and the premiere Mortgage Field Services Trade Association, IAFST is capable of providing training legally and without the liability associated with creating employees when firms train their independent contractors.
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