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New Federal Guidance on Employee Classification

The Federal Department of Labor (DOL) recently announced that it has withdrawn its 2015 and 2016 informal guidance on joint employment and independent contractors, effective June 7, 2017.

In the 2015 guidance under the Obama administration, the DOL reiterated its use of the “the economic realities test” to determine whether someone was an independent contractor or an employee. While this test was not new, the surprise at the time was that DOL took the position that “most workers are employees under the Fair Labor Standards Act’s (FLSA) broad definition” and indicated that it would focus on investigating independent contractor misclassification claims. Our previous alert on the 2015 guidance can be found in our 2015 August post.

On January 20, 2016, the DOL issued further guidance on joint employment relationships stating that “the concept of joint employment, like employment generally, ‘should be defined expansively.’” This guidance continued the concept that most people working essentially full time for an employer was entitled to employment protections. Under the new administration, the DOL is clearly indicating that, while the FLSA definitions are not changing, this administration is not going to take an expansive view of these often complex classification issues and is not going to make enforcement a priority as did the Obama administration.

Employers must be aware however, that classification issues are governed by state as well as federal law, and states such as New Jersey are extremely expansive in their view of assuming an employment relationship, as discussed in our 2015 January Client post.

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David I. Rosen, Sills Cummis Gross, Wrongful Dismissal Lawyer, Labor Arbitration Attorney
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David I. Rosen has practiced labor and employment law on behalf of management clients since 1977. He handles employment litigation in the federal and state courts, before administrative agencies and through arbitration and mediation, and has broad experience with wrongful dismissal and employment discrimination claims, having successfully defended employers following jury and bench trials. His litigation experience extends to the enforcement and defense of restrictive covenants, NLRB unfair labor practice trials and appellate advocacy. Mr. Rosen also represents employers in labor...

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Galit Kierkut, Employment Litigation Attorney, Sills Cummis Gross, Social Media Matters Lawyer
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Galit Kierkut concentrates her practice on employment litigation and counseling. She conducts human resources audits, performs management and employee training in all areas, including sexual harassment, social media and electronic communications use, and counsels clients regarding compliance with state and federal employment laws, including discrimination laws, the Fair Labor Standards Act (FLSA), family and medical leave, and the Worker Adjustment and Retraining Notification (WARN) Act. She also reviews and drafts employee handbooks, social media policies and employment contracts, including restrictive covenants and severance agreements. Her employment litigation practice is primarily focused on resolving claims in the areas of discrimination, sexual harassment, restrictive covenants, whistleblowing and employment contract disputes in state and federal courts and before the Department of Labor and the Equal Employment Opportunity Commission (EEOC).

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Charles Kaplan, Sills Cummis Gross, Labor Employment Attorney, Affirmative Action Matters Lawyer
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Charles H. Kaplan is a Member of the Sills Cummis & Gross Employment and Labor Practice Group and is resident in the Firm’s New York Office.  Mr. Kaplan represents employers in federal and state trial and appellate courts, as well as before enforcement agencies, including the U.S. Equal Employment Opportunity Commission, the National Labor Relations Board, the Office of Federal Contract Compliance Programs of the U.S. Department of Labor, the New York State Division of Human Rights, the New York State Department of Labor and the New York City Commission on Human Rights.

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