Articles Discussing Independent Contractors.

By: Uber and Lyft Ordered to Reclassify Their Drivers as Employees

As we recently reported, the State of California, joined by the cities of San Francisco, San Diego, and Los Angeles, recently filed a lawsuit against Uber and Lyft in San Francisco Superior Court, alleging that they unlawfully persist in classifying

Executive Summary: Applying the “economic realities” test, the Fifth Circuit (with jurisdiction over federal courts in Louisiana, Mississippi, and Texas) recently held that a consultant for an oil and gas company was not subject to FLSA overtime requirements because he was an independent contractor.

Virtual marketplace companies such as Uber, Lyft, and Handy are receiving a boost in their quest to classify workers as independent contractors. The U.S. Department of Labor issued a new guidance opinion about whether a worker is an employee or an independent contractor. This guidance, issued April 29, 2019, is the first issued during the Trump era. It discusses the hot-button topic of employee versus independent contractor classification involving a virtual marketplace company.

Citing the interest expressed by “law firms, unions, and advocacy organizations, among others,” the U.S. Department of Labor (DOL) has extended the period for public comment on recently-issued Notices of Proposed Rulemaking (NPRM) regarding amendments to the regulations concerning determination of the “regular rate” of pay under the Fair Labor Standards Act (FLSA) and to amendments clarifying what constitutes a “joint employer” under the Act.

he United States Department of Labor has provided good news for gig economy employers, telling one unidentified “virtual marketplace” employer that its service providers are properly classified as independent contractors. While advisory and non-binding, the April 29, 2019, Opinion Letter FLSA2019-6 provides insight into how the current DOL views independent contractor (mis)classification, and continues this administration’s departure from the DOL guidance under the Obama administration that assumed most workers are employees and not independent contractors.

Yesterday, the Ninth Circuit issued its decision in Vazquez v. Jan-Pro Franchising, Inc., holding that last year’s California Supreme Court decision in Dynamex Operations West v. Superior Court applies retroactively. This is the first published decision addressing the retroactivity of the Dynamex decision.

In its first substantive guidance on independent contractors, the Trump Administration has targeted misclassification in the healthcare industry.

The Wage and Hour Division of the Department of Labor (DOL) issued a Field Assistance Bulletin (FAB) on Friday, July 13, 2018, titled “Determining Whether Nurse or Caregiver Registries Are Employers of the Caregiver.”1 Although this FAB focuses on the caregiver registry industry, it provides the new administration’s first substantive guidance on independent contractor classification.

In a recent classification case involving the “gig” or shared economy, a U.S. magistrate judge handed down a significant win for Grubhub, concluding that a driver who sued the company under California’s minimum wage, overtime and employee expense reimbursement laws was not covered by those laws because he was an independent contractor, not an employee.

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On July 12, 2017, the U.S. House Committee on Education and the Workforce held a hearing concerning the need for legislation to redefine the joint employer standard.1 As many employers are aware, the interpretation of when employers constitute “joint employers” has been expanded in the last few years, by the U.S. Department of Labor, the National Labor Relations Board, other regulatory bodies, and the courts. In the hearing, led by Chairwoman Virginia Foxx (R-NC), several witnesses highlighted the difficulties posed by the evolving joint employer standard, particularly for small businesses. Witnesses and representatives considered whether legislation could alleviate, or might aggravate, the confusion felt by many employers. This summary provides a background of this emerging issue as well as a brief overview of the hearing.

U.S. Secretary of Labor Alexander Acosta announced on June 7, 2017 that the Department of Labor (DOL) is withdrawing its 2015 and 2016 guidance on joint employment and independent contractors. The withdrawal indicates a possible shift in focus for the DOL, away from the increased scrutiny of business arrangements under the Obama administration.

On June 7, Secretary of Labor Alexander Acosta announced the withdrawal of two Administrator Interpretations (“AIs”) issued under the Obama administration regarding joint employment and independent contractors. We previously discussed the AI on independent contractors here, and the AI on joint employment here and here.

Recently, Uber announced that it agreed to pay drivers in California and Massachusetts $100 million in an effort to ensure that the drivers are considered independent contractors, not employees. In just six years, Uber has expanded from its base in San Francisco to over 300 cities across the world. With more than 450,000 drivers using the company’s app each month in the U.S. alone, a determination that its drivers were misclassified as independent contractors rather than employees could be extremely costly for the ride-sharing company, currently valued at $62.5 billion.

Economists and business commentators believe that the U.S. economy is moving from a world of corporations to a world of “pop-up” businesses. Further, they point out that these pop-up businesses are powered by what’s becoming known as “gig workers” – a term borrowed from the music industry, where musicians move from job to job (gig to gig), employed for a particular performance or a defined time, with little more connection to the venue than to the fast food they’re eating for lunch.