“A plan by Flowers Foods – the makers of Wonder Bread, Tastykake and other brands – to spend $50 million to stop using independent contractors to distribute its products and switch to an employee model highlights the questions companies should consider when they mull whether to convert their workforces,” according to a Sept. 18 analysis in Law360 Employment Authority.
Titled “Flowers Foods Spotlights Tough Call Of Reclassifying Workers,” the piece notes that the company’s decision comes in the wake of a settlement involving multiple territories in California and is “subject to court approval of the deal, which includes another $55 million in payments to distributors Flowers Foods Inc. allegedly misclassified.”
A key difference between workers classified as employees and those classified as independent contractors is that employers exert far more control over employees, Partner Todd Lebowitz says. This can be a good thing, he says, allowing employers to manage labor costs by limiting “their exposure to things like overtime and obligation to reimburse expenses.”