Employees or Independent Contractors?
Allstate Insurance Agents – Employees or Independent Contractors?
Since the mass conversion of its employee agents to independent contractors in Allstate’s “Preparing for the Future” reorganization initiative in 2000, agents under contract with Allstate Insurance Company have been classified by the company as independent contractors. However, the job description of the ‘independent contractor’ agents is fundamentally identical to that of the former employee agents. Many agents contend they have been misclassified. The company does not treat its agents in the manor it projected in its private letter ruling request, and disregards the generally accepted principles of an independent contractor relationship. The massive worker reclassification effort appears to have been engineered solely to profit from certain tax-advantaged strategies; the company has evaded the financial burdens of an employee agent work force without giving up the complete domination and control of its workers. Agents have been deprived of employee benefits and protections including workers compensation, unemployment benefits, wage and overtime regulations, discrimination protection, and ERISA standards for the Termination Payment Provision (TPP) which replaced the Agent Pension Plan.
NAPAA members can login to view numerous articles that outline behavior that indicates an employer/employee relationship does indeed exist between Allstate and its agents. Search the category “IC v. Employee” in the articles tab.
This information is provided for general information and should not be construed as legal advice or legal opinion on any specific facts or circumstances.