DOL WITHDRAWS GUIDANCE ON INDEPENDENT CONTRACTOR MISCLASSIFICATION
Trump DOL Withdraws 2015 Obama Administration Guidance
Secretary of Labor Alexander Acosta announced earlier this month that the Department of Labor would be withdrawing it’s 2015 guidance regarding independent contractors. In 2015, the Wage and Hour Administrator issued an “Administrator’s Interpretation” addressing the misclassification of employees as independent contractors under the Fair Labor Standards Act (FLSA).
The decision to withdraw the Administrator’s Interpretation should come as no surprise. Significant changes to enforcement efforts in certain areas the Department of Labor oversees was expected following the 2016 presidential election. This withdrawal should not be viewed as a change in the Department of Labor’s position or enforcement efforts regarding misclassification. As noted in the news release, the Department of Labor will continue to fully and fairly enforce all laws within its jurisdiction, including the FLSA, and expects employers to uphold their legal responsibilities under the law.
While it is likely that the Department of Labor will not expend its resources to pursue companies that have unwittingly violated the FLSA by failing to structure their independent contractor relationships correctly, employers can still expect the Department of Labor to go after companies who flagrantly violate the law or exploit low-wage workers.
The Administrator’s Interpretation, which issued July 15, 2015, set forth the test that would be used by the Department of Labor in enforcing its wage and hour laws against companies that classify employees as independent contractors. It defined employer very broadly and independent contract very narrowly. As a result, few workers could be treated as independent contractors.
To remain compliant, employers should review the Fact Sheet issued by the Department of Labor regarding this issue.
The Nevada Association of Employers (NAE) is dedicated to ensuring that employers are able to compete lawfully, ethically, and efficiently in the state of Nevada. To that end, NAE provides employers guidance on issues like this one.
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