Tuesday, June 9, 2015

DOL set to publish guidance on independent-contractor status

Later this morning, I’ll board a flight for New York City to tape a segment for John Stossel’s Fox News show, to air Friday at 8 pm on Fox Business. We’ll be discussing the over-complexity of labor and employment laws, and their over-regulation of American businesses.

I’m certain one topic to be covered is our wage-and-hour laws. Serendipitously, according to Employment Law 360 [subscription required], Department of Labor Wage and Hour Division administrator David Weil recently announced that he will shortly publish an “administrator interpretation” to clarify who qualifies as an independent contractor.

The distinction between employee and contractor continues to beguile employers, and is ripe for problems under both wage-and-hour laws (among other legal entanglements). Individuals continue to file multi-million dollar class-action lawsuits claiming mis-classification as contractors cost them years of unpaid overtime. And, courts continue to take a hard line against companies that try to skirt their legal responsibilities via these mis-classifications.

Is it too much to hope for a reasonable interpretation from administrator Weil that permits bona fide contractors to remain classified as such? He speaks of a "holistic," as opposed to "mechanical" approach, which "requires a careful consideration of the economic realities and multiple aspects of the relationship." Expect a fuzzy standard with lots of gray area, which will continue to cause employers fits. Or, in other words, expect the status quo to continue, with employers who classify all but the clearest of workers as employees taking a huge wage-and-hour gamble.