Learn How Misclassifications Can be a Legal Nightmare for Employers!
The new independent contractor rule from the U.S. Department of Labor (DOL) could spark an increase in misclassification lawsuits and make businesses less likely to hire gig workers, according to some legal experts.
The final rule restores an earlier standard that required companies to weigh a variety of economic factors together to determine whether a worker is an employee or an independent contractor. It will take effect on March 11.
It should not be a strange test to employers. We’re back to where we were in the past. At the end of the day, it’s the courts that really have the power to make that determination about whether an employer misclassified a worker.
The new rule returns to a more employee-friendly standard, and it may usher in a wave of misclassification lawsuits under the Fair Labor Standards Act (FLSA).
The current rule prescribes a five-factor test to guide the analysis, two of which were designated as “core factors” carrying more weight:
1) nature and degree of control over the work and
2) the worker’s opportunity for profit or loss. As such, under the “core factor” test,
if these two factors point in the same direction – an independent contractor – then it is likely that the worker is properly classified as an independent contractor.
By contrast, the proposed six-factor totality test eschews any predetermined weighting. Rather, it requires that each factor be considered in light of the economic reality of the entire activity at issue. The six factors are:
Considering this heightened scrutiny and potential narrower legal standard, it is now more important than ever to evaluate how companies structure an independent contractor relationship. It is particularly important for employers to seek guidance from experienced counsel when developing and implementing policies related to working with independent contractors.
Considering this heightened scrutiny and potential narrower legal standard, it is now more important than ever to evaluate how companies structure an independent contractor relationship. It is particularly important for employers to seek guidance from experienced counsel when developing and implementing policies related to working with independent contractors.
Margie Faulk
Margie Faulk is a senior level human resources professional with over 15 years of HR management and compliance experience. A current Compliance Advisor for HR Compliance Solutions, LLC, Margie, has worked as an HR Compliance advisor for major corporations and small businesses in the small, large, private, public and Non-profit sectors. Margie has provided small to large businesses with risk management strategies that protect companies and reduces potential workplace fines and penalties from violation of employment regulations. Margie is bilingual (Spanish) fluent and Bi-cultural.Margie’s area of expertise includes Criminal Background Screening Policies and auditing, I-9 document correction and storage compliance, …
How to Give Corrective Feedback: The CARE Model - Eliminati…
Why EBITDA Doesn't Spell Cash Flow and What Does
Improving Employee Engagement & Retention Through Stay Inte…
SOPs - How to Write Them to Satisfy those Inspectors
With Mandatory Paid Leave Gaining Ground Is It Time To Do A…
Documenting Misconduct that Will Stand Up in Court
Marketing to Medicare or Medicaid Beneficiaries - What You …
Human Error Reduction Techniques for Floor Supervisors
Project Management for Non-Project Managers - How to commun…
Tattoos, hijabs, piercings, and pink hair: The challenges …
Trial Master File (TMF)/eTMF, & FDAs Draft Guidance for Ele…
Sunshine Act Reporting - Clarification for Clinical Research
Humane Layoffs: How to Let People Go with Compassion and De…
FFIEC BSA/AML Examination Manual: What Compliance Officers …
Female to Female Hostility @Workplace: All you Need to Know
OSHA Requirements for Supervisors, Project Leaders & HR - W…
Unlock Employee Loyalty: Stay Interviews Will Keep Them Eng…
Conquer Toxic People - Learn To Protect Yourself And Get Yo…
Understanding the Artificial Intelligence Landscape
Establishing Appropriate Quality Metrics and Key Performanc…
Ultimate Persuasion Strategies! - Secret Influence Tools & …
Using High-Performance Coaching for Managers to Address Per…
Excel - 10 Key Worksheet Functions to Skyrocket Your Produc…
Is Your Culture Working For or Against Your Success? If You…
Red flags that can render your OSHA Safety Program Complete…
Utilizing HR Metrics to Illustrate & Improve Human Resource…
The Anti-Kickback Statute: Enforcement and Recent Updates
Onboarding is NOT Orientation - How to Improve the New Empl…
FDA Technology Modernization Action Plan (TMAP) and Impact …
How to Prepare For and Host a FDA Inspection and Respond to…
Excel - Pivot Tables - The Key To Modern Data Analysis and …
Managing Toxic & Other Employees Who Have Attitude Issues
Building GMP Excellence: A Guide to Implementing Compliant …
Excel Power Skills: Master Functions, Formulas, and Macros …