Recent developments at the National Labor Relations Board (NLRB) and the U.S. Department of Labor’s Wage and Hour Division (DOL) could make it more difficult for businesses to classify workers as independent contractors. On January 6, the NLRB and the DOL announced that they entered a Memorandum of Understanding which provides for and encourages interagency cooperation through “information sharing, joint investigations and enforcement activity, training, education, and outreach.” In a separate press release, the NLRB stated that the Memorandum of Understanding “will allow for better enforcement against… misclassification of workers as independent contractors.”
Businesses that use independent contractor work would pay attention to the news out of Washington, D.C., because on October 11, the U.S. Department of Labor (DOL) announced its long-awaited proposed rule on contractor classification. The proposed rule would impose a six-factor “economic reality test,” with all the factors equally weighted. The six-factor test would look broadly at the “totality of the circumstances” to determine whether a worker is an independent contractor or employee under the Fair Labor Standards Act (FLSA).
According to the DOL press release, the proposed rule provides a framework more consistent with existing judicial precedent than the current rule, which was promulgated by the prior administration. Indeed, the proposed rule expressly rescinds the currently applicable rule. The public has 45 days to comment on the proposed rule once it is printed in the Federal Register on Oct. 13.
Join us on this December to learn the recent developments at the DOL and the NRLB that Employers must know about. Get a FREE customized compliance tool to help you become more compliant. Register today!
