DOL

‘Employee’ or ‘independent contractor’? DOL proposed definitions could save companies millions

A new U.S. Department of Labor proposal aimed at clarifying whether workers should be classified as “employees” or “independent contractors” could have a major impact on how companies do business and pay their workers – although there are a number of “ifs” associated with the proposition.

“The Department’s proposal aims to bring clarity and consistency to the determination of who’s an independent contractor under the Fair Labor Standards Act (FLSA),” said Secretary of Labor Eugene Scalia. “Once finalized, it will make it easier to identify employees covered by the Act, while respecting the decision other workers make to pursue the freedom and entrepreneurialism associated with being an independent contractor.”

“The rule we proposed today continues our work to simplify the compliance landscape for businesses and to improve conditions for workers,” said Wage and Hour Division Administrator Cheryl Stanton. “The Department believes that streamlining and clarifying the test to identify independent contractors will reduce worker misclassification, reduce litigation, increase efficiency, and increase job satisfaction and flexibility.”

Announced on Sept. 22, the DOL’s proposed rule would:

  • Adopt an “economic reality” test to determine a worker’s status as an FLSA employee or an independent contractor. The test considers whether a worker is in business for himself or herself (independent contractor) or is economically dependent on a putative employer for work (employee)
  • Identify and explain two “core factors” — specifically the nature and degree of the worker’s control over the work, and the worker’s opportunity for profit or loss based on initiative and/or investment. Those factors help determine if a worker is economically dependent on someone else’s business or is in business for himself or herself;
  • Identify three other factors that may serve as additional guideposts in the analysis: the amount of skill required for the work; the degree of permanence of the working
Continue Reading

Say Yes To Accommodations, DOL Official Tells Contractors

Law360 (October 2, 2020, 6:47 PM EDT) — Companies that do business with the federal government should find ways to grant employees’ requests for disability and religious accommodations in nearly all circumstances, a U.S. Department of Labor official said Friday.

“Generally, if you’re a federal contractor, you need to be granting almost every accommodation request,” Office of Federal Contract Compliance Programs director Craig Leen said. He spoke during a session on OFCCP equality initiatives at a virtual labor and employment conference hosted by New York University School of Law. Karen Gillen of O’Melveny & Myers LLP, who represents employers, moderated the discussion.

Leen said OFCCP has been scheduling employers for…

Stay ahead of the curve

In the legal profession, information is the key to success. You have to know what’s happening with clients, competitors, practice areas, and industries. Law360 provides the intelligence you need to remain an expert and beat the competition.

  • Access to case data within articles (numbers, filings, courts, nature of suit, and more.)
  • Access to attached documents such as briefs, petitions, complaints, decisions, motions, etc.
  • Create custom alerts for specific article and case topics and so much more!

TRY LAW360 FREE FOR SEVEN DAYS

Source Article

Continue Reading

DOL Proposed Rule Clarifying Test for Worker Classification

On September 22, 2020, the United States Department of Labor (DOL) released a long-awaited proposed rule (the “Proposed Rule”) providing guidance for determining employee versus independent contractor status under the Fair Labor Standards Act (FLSA).  For decades, employers have struggled with properly classifying workers, oftentimes resulting in substantial liability for, among other things, unpaid overtime and unpaid payroll taxes.  If adopted, the Proposed Rule may make it easier for employers to classify workers as independent contractors.

Background and the Need for Rulemaking

While the employee versus independent contractor debate has garnered significant attention over the years as more workers desire the flexibility that comes with contractor status, the DOL has never promulgated a formal regulation addressing the matter.  Instead, since 1954, the DOL has issued and revised guidance based upon a multifactor “economic reality” test, which focuses on the economic independence of the worker.  This evolving guidance, mostly issued through opinion letters, has often been anything but clear.

The Proposed Rule critiqued the DOL’s prior guidance on the issue as follows:

First, the test’s overarching concept of “economic dependence” is under-developed and sometimes inconsistently applied, rendering it a source of confusion. Second, the test is indefinite and amorphous in that it makes all facts potentially relevant without providing any guidance on how to prioritize or balance different and sometimes competing considerations. Third, inefficiency and lack of structure in the test further stem from blurred boundaries between the factors. Fourth, these shortcomings have become more apparent over time as technology, economic conditions, and work relationships have evolved.

The Proposed Ruled is intended to bring clarity and consistency to the employee versus independent contractor determination, allowing employers to more readily identify workers covered by the FLSA and at the same time respecting the prerogative of workers to pursue

Continue Reading

How DOL Proposal Changes Independent Contractor Analysis

Law360 (September 28, 2020, 1:48 PM EDT) — On Sept. 25, the U.S. Department of Labor issued a notice of proposed rulemaking[1] and request for comments in the Federal Register that seeks to simplify and clarify how to determine whether a worker is an independent contractor or employee under the Fair Labor Standards Act.

The DOL has fast-tracked this rule and appears committed to finalizing the proposed regulations before the end of the year.

President Franklin Roosevelt signed the FLSA following the Great Depression and before the U.S. entered World War II when the options for work were largely limited to earning a wage by working for someone else….

Stay ahead of the curve

In the legal profession, information is the key to success. You have to know what’s happening with clients, competitors, practice areas, and industries. Law360 provides the intelligence you need to remain an expert and beat the competition.

  • Access to case data within articles (numbers, filings, courts, nature of suit, and more.)
  • Access to attached documents such as briefs, petitions, complaints, decisions, motions, etc.
  • Create custom alerts for specific article and case topics and so much more!

TRY LAW360 FREE FOR SEVEN DAYS

Source Article

Continue Reading