The Obama Department of Labor’s past insistence that independent contractors are nothing more than misclassified employees remains firmly in place five months into the Trump Administration.
During the Obama Administration, DOL investigators were specifically hired and trained to detect and attack this alleged misclassification. The department also entered into partnerships with 37 states, working with them to target misclassification.
Employers should expect DOL enforcement to continue, warns attorney Mary Davis of the law firm of LeClairRyan.
“Companies that supplement workforces with independent contractors should not view the change in Washington as an invitation to misclassify workers,” she says.
Even if federal government enforcement efforts are eventually given a lower priority by the Trump DOL, employers should expect state departments of labor to fill that void under their joint enforcement initiatives, Davis points out.
On its website, DOL continues to characterize employee misclassification as “one of the most serious problems facing affected workers, employers and the entire economy.”
Employers also should anticipate that plaintiffs’ class action lawyers will continue to target misclassification, she says.
DOL directs employers to focus on the broad definition of “employ” under the Fair Labor Standards Act and the “economic realities” test developed by the courts, and says application of these factors “should be guided by the overarching principle that the FLSA should be liberally construed to provide broad coverage for workers.”
Davis stresses, “The change in leadership in Washington will not impact an employer’s need to comply. Government investigators and plaintiffs' attorneys are focused on the issue. Employers should focus on and review their worker classifications as well.”