Sometimes this answer can become opaque when considering the different layers to an organization a federal contractor may have. For example, does the organization have independent contractors or non-employees who work or have worked in the building but are not a part of the company? Should these employees be included in the AAP? Determining the answer to this can be challenging. OFCCP recommends that contractors review the workers’ relationship to the contractor using something called the Darden factors.
The Darden factors come from the 1992 U.S. Supreme Court case Nationwide Mutual Insurance Co. v. Darden, 503 U.S. 318. The ruling of this case created the Darden factors that are used to help federal contractors determine if individuals in their organization are employees and should be included in their AAP. Below is a list of the Darden factors to use when considering who is an employee:
What Are Darden Factors?
- The contractor’s right to control when, where, and how the individual performs the job
- The skill required for the job
- The source of the instrumentalities and tools
- The location of work
- The duration of the relationship between the parties
- Whether the contractor has the right to assign additional projects to the individual
- The extent of the individual’s discretion over when and how long to work
- The method of payment
- The employer’s role in hiring and paying assistants
- Whether the individual’s work is part of the regular business of the contractor
- The provision of employee benefits to the individual
“After examining the Darden factors, federal contractors must then decide if the individual they are considering is a true employee.”
It’s important to note that using the Darden factors to evaluate an individual is a case-by-case assessment and there might not be a clear answer for each person. After examining the Darden factors, federal contractors must then decide if the individual they are considering is a true employee. If not, they do not have to be included in the AAP. However, it’s important to maintain documentation around the decision to not include that employee. If audited by OFCCP, the agency could evaluate the decision and may request that documentation.
OFCCP also maintains that they can conduct their own Darden analysis during a compliance review and can make the final determination as to whether an individual is correctly classified as a non-employee. For more information about who should be included in the AAP and Darden factors, your Berkshire consultant can assist.
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