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June 21, 2017

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New developments in the Department of Labor's guidance regarding employee vs. independent contractor status.

June 14, 2017

As the gig economy continues to grow, so do the challenges surrounding classification of workers. Companies like Uber, Lyft, Handy and Task Rabbit have asserted that their drivers, handymen and task-ers qualify as independent contractors. Many labor lawyers argue otherwise, however, classifying a worker's status is far from black and white as the economic realities test is subject to interpretation. 

 

Yesterday, the National Law Review reported on the subject, stating that the Department of Labor has been signaling a move toward tightening the definition of employee status. The article sites U.S. Secretary of Labor Alexander Acosta's announcement that the department would be withdrawing its 2015-2016 Administrative Interpretations of joint employment and independent contractors. This includes the guidance that most workers are employees, rather than independent contractors, and the guidance distinguishing between horizontal and vertical joint employment relationships. 

 

Although the department made it clear that business would still need to comply with the Fair Labor Standards Act and the Migrant and Seasonal Agricultural Worker Protection Act, the withdrawal signals the department may be moving quickly toward limiting the scope of the definition of "employment" and alleviate some of the costs and responsibilities an employment relationship puts on a business. 

 

Though this tightening of the definition of "employment" may take some burdens away from companies, these burdens may now be placed on the backs of workers, who may no longer require "employee" status as workers and may lose some of the benefits that accompany that status. 

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