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.
Articles Discussing Independent Contractors.
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.
He insists that he cannot provide a hair sample for testing purposes.
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.
This month, two New York federal judges reviewing a claim of misclassification rejected a claim for overtime compensation, agreeing that a business properly classified two translators as independent contractors rather than as “employees” under the Fair Labor Standards Act and the New York Labor Law. See Mateo v. Universal Language Corp., 2015 U.S. Dist. LEXIS 128638 (E.D.N.Y. Sept. 4, 2015), aff’d by 2015 U.S. Dist. LEXIS 128377 (E.D.N.Y. Sept. 23, 2015).
Employers across the country continue to misclassify workers as independent contractors rather than as employees, and as we recently saw in Alexander v. FedEx Ground Package System, Inc., such actions can result in litigation and federal and state scrutiny.
In Alexander v. FedEx Ground Package System, Inc., 2014 U.S. App. LEXIS 16585 (9th Cir. Aug. 27, 2014), the Ninth Circuit Court of Appeals held that former Federal Express drivers were employees rather than independent contractors pursuant to California’s right-to-control test. This important decision is likely to reach across all industries and will cause regulators and attorneys to closely examine independent contractor agreements to determine if the employer retains sufficient direction and control over the manner or means by which the work is to be performed. This case teaches that no matter how workers are labeled by the employer, the substance of the work relationship is what controls the classification status.