Consultant Reclassified as City Employee in Pension Ruling
New Bedford businesses should review independent contractor agreements following a recent state administrative ruling.
Updated on Oct. 15, 2026 in Human Resources
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The Division of Administrative Law Appeals ruled that a consultant who performed municipal duties in New Bedford must be recognized as an employee. The decision forces the city to allow the purchase of 19 months of creditable pension service for the worker.
Why it matters
This ruling highlights how supervisory control and the use of company-provided resources can override contractor status. For operators, it underscores the risk of reclassification claims when individuals perform core employee functions under direct management.
An administrative law judge overturned the New Bedford Retirement Board's decision, granting the petitioner 19 months of pension service credit. The ruling is detailed in a 16-page administrative decision.
The players
New Bedford Retirement Board
The local government authority responsible for managing and adjudicating retirement benefits and service credit eligibility for city personnel.
Division of Administrative Law Appeals
A state-level adjudicatory body that hears and resolves disputes regarding public employee retirement systems and administrative decisions.
The details
The appeal centered on whether the individual functioned as an independent contractor or an employee while working in City Hall from 2021 to 2023. Because the petitioner used city-provided equipment and worked under the direct supervision of the mayor and the Chief Financial Officer, the court concluded the relationship met the criteria for employment rather than contracting. Consequently, the city must now treat the term of service as pension-eligible work time.
Timeline
2021-2023: The petitioner served as a consultant for the City of New Bedford.
May 23, 2025: The New Bedford Retirement Board initially declined the purchase of service credits.
October 2, 2026: The administrative magistrate issued the final ruling on the appeal.
Market Landscape
This ruling follows the long-standing regulatory standard where behavioral control and company integration define employment status regardless of contract labels. It serves as a reminder that courts increasingly scrutinize the 'economic reality' of working relationships.
Business owners should audit existing consulting agreements to ensure that contractors maintain operational independence and avoid receiving direct, daily supervision. Relying on an individual to perform standard internal duties using company resources creates significant risk for reclassification.
The takeaway
The degree of management oversight and the use of employer-provided tools are primary indicators used to determine worker status. Operators should consult with counsel to evaluate if their current contractors are functioning as employees to avoid future benefit and compliance liabilities.
Further reading
For more on managing worker classifications, review the Human Resources section.
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Should government consultants who perform full-time employee duties receive the same retirement benefits as permanent staff?
