Over the last few years, there has been considerable discussion about the standards for determining when a joint employment relationship exists and who is or is not considered an independent contractor. The Department of Labor (DOL) issued informal guidance on these topics in 2015 and 2016. In fact, these issues were addressed at several recent Warner HR seminars.
An announcement from the DOL has confirmed that the 2015 and 2016 informal guidance were withdrawn yesterday, June 7, 2017. The DOL states: “This change has not affected the responsibilities of employers under the Fair Labor Standards Act or the Migrant and Seasonal Agricultural Worker Protection Act, as reflected in the Department’s long-standing regulations and case law.”
While it is not yet clear what all of this will mean, particularly with respect to how independent contractors are classified, there are a couple of things you should remember. While the guidance did give a broad indication of how the DOL would be looking at these issues, the final say on both the classification of independent contractors and who is a joint employer has and will continue to lie with the courts. Just like issuing the guidance did not change the law, withdrawing the guidance does not either and it is the courts that will be the ultimate decision maker here. Another thing we may see is the states stepping in to fill in any gaps that state legislatures feel now exist. As we have seen with minimum wage issues when there is no federal consensus, states and even local governments have not hesitated to get in the game. This could ultimately make things even more difficult for employers, especially employers with multi-state operations who may now have to deal with different standards for different locations.
For more information about the Fair Labor Standards Act, the Migrant and Seasonal Agricultural Worker Protection Act, and what this recent change means for employers like you, contact your Warner Labor and Employment attorney.
