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October
22

DOL Rescinds Guidance on Independent Contractors and Joint Employment

The U.S. Department of Labor rescinded the controversial Administrator Interpretations issued in 2015 and 2016 regarding its previous guidance on independent contractors and joint employers.

The announcement reads: “The Department of Labor’s 2015 and 2016 informal guidance on joint employment and independent contractors were withdrawn effective June 7, 2017. Removal of the two administrator interpretations does not change the legal responsibilities of employers under the Fair Labor Standards Act or Migrant and Seasonal Agricultural Worker Protection Act, as reflected in the Department’s long-standing regulations and case law. The Department will continue to fully and fairly enforce all laws within its jurisdiction including the Fair Labor Standards Act and the Migrant and Seasonal Agricultural Worker Protection Act.”

Independent Contractors

The previous guidance dealt with the misclassification of employees as independent contractors. This involved a test that looked at dependency and economic reality. While previous classification standards had been more derived from the control aspect, the guidance gave low weight to control making it more difficult to classify workers as independent contractors.

Joint Employers

The previous interpretation involved joint employment relationships under the Fair Labor Standards Act. These could be found as horizontal, doing business together; or vertical. This further emphasized the control factor. This made it easier to classify employers doing business together to be considered joint employers.

Conclusion

While these two items will not significantly alter the way employers do business, it is a clear message that the DOL is transitioning to more employer friendly stance.