Q&A: managing the employment relationship in the USA (New Mexico)

Work relationship

State specific laws

What state-specific laws govern the employment relationship?

Chapters 28, 50, 51, and 52 of the New Mexico statutes contain most of the guidelines for private employer-employee relationships.

The New Mexico Administrative Code includes administrative rules governing employment matters, primarily Titles 9 and 11.

Who are they covered, including categories of workers?

These laws generally cover employees. Certain provisions, including anti-discrimination laws, also apply to applicants.

Misclassification

Are there any state-specific rules regarding the misclassification of employees/contractors?

Generally, employers should consult case law interpretations and regulations regarding the definition of “employer”, “employer” and “employee”. A case applying a common law definition of independent contractor in the context of worker’s compensation exclusivity is Shipman vs MacCo Corp. (1964-NMSC-091, 74 NM 174, 392 P. 2d 9). The New Mexico Department of Taxation and Revenue also has guidance regarding the classification of workers as employees or independent contractors. See also NMSA § 51-1-42(F)(5) (unemployed) and NMSA § 60-13-3.1 (construction contractors).

For purposes of assessing liability in civil litigation, the New Mexico Uniform Jury Instructions provide definitions of “employer” and “independent contractor.”

Contracts

Should an employment contract be in writing?

No, New Mexico recognizes both oral and implied contracts (Lopez vs. Kline1998-NMCA-016, 124 NM 539, 953 P.2d 304 and West vs. Washington Tru Solutions, LLC2010-NMCA-001, 147NM 424, 224 P.3d 651).

Are there any implied clauses in employment contracts?

Subject to certain limitations (including contracts of at-will employment and express provisions contemplated by the terms of an incorporated written contract), New Mexico law implies a duty of good faith and fair treatment of all obligations contracts, including employment contracts (Melnick c. State Farm Mut. Auto. Ins. Co., 1988-NMSC-012, 16, 106 NM 726, 730, 749 P.2d 1105, 1109; Beaudry v. Farmers Ins. Exchange., 2018-NMSC-012, 22, 412 P.3d 1100, 1107).

Are binding arbitration agreements enforceable?

“Arbitration is a ‘highly valued’ method of resolving disputes. . . therefore, when the parties have agreed to arbitrate, the courts must impose the arbitration” (Piano c. First Dist. Co., 2005-NMCA-018, 5, 137 NM 57, 60, 107 P.3d 11, 14).

Subject to important conditions and limitations, the New Mexico Uniform Arbitration Act permits arbitration of labor disputes (NMSA § 44-7A-1 et seq.).

How can employers make changes to existing employment contracts?

The employer may modify an employment contract expressly, in writing (provided the employer meets the requirements for a valid contract and/or modification under state contract law).

Employers may also modify an employment contract based on verbal (eg, statements made by managers) or written (eg, in a manual) statements and/or a course of action, under an implicit contract theory.

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