Reference no: EM132346937

A company sells health insurance policies. The company has a large, independent contractor sales force. Some of its sales agents, usually after a significant period of service, are promoted to the position of sales leader. Sales leaders agree to remain as independent contractors when they are promoted. Sales leaders do little selling of policies; instead, their main responsibilities are recruiting, training, and managing sales agents. The income of sales leaders is mainly derived from overwrite commissions on their subordinates' sales. The company retains control over the hiring, firing, assignment, and promotion of sales agents. The company determines sales leaders' territories and does not permit them to sell other insurance products or operate other businesses. Sales leads are distributed by the company, and sales leaders are prohibited from purchasing leads from outside sources. Sales leaders set their own hours and conduct their day-to-day activities largely free from supervision. Attendance at company meetings and training sessions is generally considered optional for sales leaders. Sales leaders receive no benefits, and the company does not withhold any of their pay for tax purposes. Several sales leaders sued for overtime pay under the Fair Labor Standards Act.

Question:

Are the sales leaders employees or independent contractors? Why?