Recent Employee-Independent Contractor Classification Wage Ruling from 8th Circuit

On June 15, 2026, the Eighth Circuit reversed a District of Minnesota federal court ruling in Li v. New Asia Chinese Restaurant Wan Da Inc., Case No. 25-2500, which classified a restaurant delivery driver as an independent contractor rather than an employee. The plaintiff, a food delivery worker, alleged wage and hour violations under the Fair Labor Standards Act ("FLSA"). The appellate court applied the FLSA's “economic realities” test and concluded that the relevant factors favored classification of the worker as an employee rather than an independent contractor. 

In the Li case, the court found that food delivery work was integral to the restaurant’s business. The driver’s investment in his vehicle was relatively minor compared to the restaurant’s overall investment, and the restaurant exercised control over the worker by determining his pay and delivery locations. The worker also worked six days per week and remained on call to make deliveries. Finding the worker to be an employee, the district court's judgment was reversed by the appellate court and the case was remanded for additional proceedings.

This decision, while unpublished, provides a good reminder of the risks of worker misclassification under Minnesota labor law and the FLSA. Being classified as an employee provides various legal protections including minimum wage guarantees, overtime pay, anti-discrimination laws, unemployment benefits, workers' compensation for job injuries, and mandatory tax contributions paid by your employer. Businesses cannot avoid paying minimum-wage and overtime, or forego their record keeping obligations simply by calling a worker an independent contractor. Instead, a court reviewing the classification will look at the economic realities of the relationship between employer and worker to determine whether a worker is an economically dependent employee or an independent contractor in business for themselves. courts will scrutinize the employer’s control over how the work is performed, the investments by the worker and employer, permanency of the work relationship, and whether the work is integral to the employer’s business.

Minnesota businesses are reminded to review their independent contractor arrangements to ensure their workers are properly classified.  Contact your lawyer at Bravura Group to learn more.