The U.S. Department of Labor rescinded the controversial Administrator Interpretations issued in 2015 and 2016. This was 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reads: “The Department of Labor’s 2015 and 2016 informal guidance on joint employment and independent contractors were withdrawn effective June 7, 2017.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. Basically, that made it more difficult to classify workers as independent contractors.
Joint Employers
The previous interpretation involved joint employment relationships under the Fair Labor Standards Act. Consequently, these could be found as horizontal, doing business together, or vertical. This further emphasized the control factor. Thus, made classifying employers doing business together easier to be considered joint employers.
Conclusion
While these two items will not significantly alter how employers do business, it is clear that the DOL is transitioning to a more employer-friendly stance.
