Employer Law Report

Tag Archives: independent contractor

NLRB overrules Obama-era precedent for independent contractor test

On Jan. 25, 2019, the National Labor Relations Board (NLRB) addressed its independent contractor test in a case involving airport shuttle drivers for the franchise, SuperShuttle. The SuperShuttle DFW, Inc. decision overruled the NLRB’s 2014 decision in FedEx Home Delivery, which the Board criticized as incorrectly limiting the significance of a worker’s entrepreneurial opportunity for economic gain in determining independent contractor status.…

Department of Labor rescinds recent joint employer guidance

On June 7, 2017 the Secretary of Labor, Alexander Acosta, announced that the US Department of Labor (DOL) was withdrawing its 2015 and 2016 guidance on joint employment and independent contractors. The Obama-era guidance expanded how joint employment was defined to include employers that have indirect or potential control over the terms and conditions of employment, as we previously reported. By moving away from this guidance, the DOL returns to the previous direct control standard. The move also rescinds an Interpretation Letter stating the DOL would broadly define “employee” under the Fair Labor Standards Act (FLSA) and that most …

DOL memo says most workers are FLSA employees, not independent contractors

Following on the heels of its proposed rule expanding the number of employees entitled to overtime under the FLSA, the Department of Labor’s Wage & Hour Division has issued an Interpretation Letter that addresses independent contractor misclassification. Though the Letter, issued by WHD Administrator David Weil, contains no earthshaking new compliance obligations for employers, it does suggest that businesses can expect a more aggressive enforcement regime from the Department of Labor on independent contractor issues. In fact, the Letter directly states that “applying the economic realities test in view of the expansive definition of “employ” under the Act, most workers …

Sixth Circuit Holds that Subcontracted Employees Can Sue the General Contractor on Construction Project as Their De Facto Employer

Yesterday, the Sixth Circuit revived the Equal Employment Opportunity Commission (EEOC)’s lawsuit against Skanska USA Building, Inc., holding that it was the de facto employer for subcontracted employees, a decision with potentially broad-reaching implications for employers with subcontracted employees and independent contractors, particularly in the construction industry.

Skanska was the general contractor for a hospital construction project. It subcontracted with C-1 Inc. Construction Company to provide operators for temporary elevators on the construction site. A C-1 employee, Maurice Knox, alleged that other workers at the work site engaged in racial slurs directed toward him and other black employees of C-1. …

Federal Court: FCRA Does Not Apply To Independent Contractor Relationships

Here is one more potential advantage of using independent contractors rather than employers that so far has flown below the radar screen.  According to a federal district court in Wisconsin, the Fair Credit Reporting Act’s disclosure obligations do not apply to independent contractor relationships.

When EMS Energy Marketing Service, Inc., terminated Phillip Lamson based on the results of a background check, it failed to provide him with a copy of the report or the written description of his rights under the FCRA as required by the Federal Trade Commission.  Lamson sued, alleging that his termination violated FCRA.  The Court concluded, …

The IRS Voluntary Compliance Settlement Program (VCSP): Does it Offer Employers Amnesty or Put a Target on Their Backs? The Answer … Probably a Little Bit of Both

We first introduced you to the Voluntary Compliance Settlement Program (VCSP), a program launched on the on the heels of the IRS announcing its three-year plan to increase audits of independent contractors (Announcement 2011-64), last September. In that post, we discussed the potential advantages and pitfalls of the VCSP. This post takes another look into the VCSP in light of the IRS’s FAQs, which answers a lot of taxpayers’ concerns but not all of them.

By way of background, the VCSP was designed to provide eligible employers partial relief from the federal employment taxes and penalties that …

Ohio H.B. 523 Would Unify Definition of Employee, Make it Easier to Find Misclassification

On Tuesday, May 25, 2010, Representatives Phillips and Driehaus introduced in the Ohio General Assembly a bill that effectively would create a single definition of “employee” for purposes of Ohio workers’ compensation, unemployment compensation, payroll taxes, minimum wage and other purposes. Presently, each statute contains its own test for determining whether an individual is an employee or an independent contractor, often resulting in conflicting results.

If passed, this legislation would create a single seven-factor test for evaluation whether an individual truly is an independent contractor.

For an individual to be an independent contractor under H.B. 523, all of the following …

New Bill Targets Worker Misclassification

The Employee Misclassification Prevention Act, (S. 3254) introduced Thursday by Senator Sherrod Brown of Ohio, would amend the Fair Labor Standards Act to require companies to keep records of non-employees who work as independent contractors and to provide special penalties for misclassifying those workers.

The Act contains certain recordkeeping provisions that would require employers to keep records reflecting whether each worker is an actual employee or an independent contractor. The Act also would require employers to provide a written notice to all workers who perform labor or services informing them that they have been classified as either an employee or “non-employee,” …

Ohio Focus on Worker Misclassification Warrants Second Look At Independent Contractor Relationships

Back in February, Ohio Attorney General Richard Cordray announced a collaboration between his office and the Ohio Department of Job and Family Services, Ohio Department of Taxation, and Ohio Bureau of Workers’ Compensation to release and exchange confidential information to reduce the number of employers that are misclassifying workers as independent contractors. A report issued at the same time by the Attorney General’s office estimated that the extent of annual costs to the state from worker misclassification totals $100 million in payments for unemployment compensation, more than $510 million in BWC premiums and almost $180 million in forgone state income tax …

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