Independent Contractors

The National Labor Relations Board issued two decisions of major interest to employers on December 14, 2017 – (1) adopting a new, more balanced test for evaluating whether workplace rules infringe upon employees’ rights under the National Labor Relations Act and (2) overturning the broad standard for determining joint employer status and returning to the prior, more practical standard.
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DOLEmployers rejoice! The Trump administration continues to roll back the anti-business positions asserted by various federal agencies under the Obama administration, as most recently evidenced by the Department of Labor’s June 7, 2017 withdrawal of two Administrator Interpretations on joint employment and independent contractor status.
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Burlesque 2So as an employment defense attorney, I am constantly amazed by the creative arguments put forth by plaintiffs and their attorneys. I am certain that the creators of certain laws would never, in their wildest dreams, have anticipated how they could be applied. A recent example of this can be found in Stevens v. Oval Office, LLC dba Oval Office Gentlemen’s Club.

As you may know, a recent hot topic for federal and state agencies is the misclassification of employees as independent contractors. According to the U.S. Department of Labor’s newly created webpage, misclassification hurts employees by denying them: minimum wage and overtime pay, the protection of federal and state employment laws, workers’ compensation and unemployment insurance, workplace health and safety protections, and employer-provided benefits. It also hurts non-compliant employers who may be subject to fines and unpaid taxes and wages, as well compliant employers who face unfair competition from those who reduce their costs by being non-compliant. And it hurts government agencies who do not receive the appropriate employment tax revenues.
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question-markFollowing my post last week on the EEOC’s latest pronouncement on independent contractor status, it seemed appropriate to follow up with the National Labor Relations Board’s most recent activity on this issue. The Board’s Office of the General Counsel (OGC) released an advice memorandum in which it first reviews the Board’s test for independent contractor status (which is, of course, different than that of the EEOC) and then goes on to assert that the misclassification of employees as independent contractors is a violation of the National Labor Relations Act.  (Curiously, it appears that the OGC actually issued the memo in a pending case, Pacific 9 Transportation Inc., back on December 18, 2015, but it only recently released it to the public on August 26, 2016. I suppose that the Board realized that this is an issue of significant interest to employers!)
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question-markSo I was trolling through the Equal Employment Opportunity Commission’s quarterly Digest of Equal Employment Opportunity Law (because, yes, I am that much of an employment law nerd), and came across an article that I thought was of particular interest: “Stating a Claim in the EEO Process: Determining One’s Status as Either an Agency Employee or Independent Contractor.” Now this article is supposed to apply only to the federal government agencies as the employer – but I think the principles set forth in it provide guidance to what the EEOC’s position would be for private employers as well. (This is important because employees are covered by federal anti-discrimination and other employment laws; independent contractors are not).
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Employers did not need another reason to complain about the burdens of the Affordable Care Act (“ACA”). Most of us know that the law includes onerous obligations on employers that have made human resources and benefits personnel’s jobs increasingly difficult. For example, you have to figure out if the law applies to your organization (how