I took last week off work to visit Asheville. The first morning, we woke up at 5 am for a sunrise hike at Craggy Pinnacle, along the Blue Ridge Parkway. This was our view at the top.
Fortunately, the fog burned off after an hour or so. We waited and were rewarded with some spectacular views. Our 7-month old puppy Louie was just happy there were other dogs at the top to play with. Here he is, admiring the view.
The lesson, of course, is to be patient and sometime the fog will clear. (Or check the weather report?)
Franchisors are hoping for the same reward, through the proposed American Franchise Act, introduced in the House in September and now before the House Committee on Education and Workforce.
The bill, which has at least some bipartisan support, would change the definition of joint employment under the NLRA and FLSA for franchisee-franchisor relationships.
The bill would establish that a franchisor can be a joint employer only if it exercises “substantial direct and immediate control” over one or more “essential terms and conditions of employment of the employees of the franchisee.”
“Essential terms and conditions of employment” means wages, benefits, hours of work, hiring, discharge, discipline, supervision, and direction.
To be a joint employer, the franchisor would have to control these terms with respect to individual employees. Setting baseline standards and brand guidelines would not create joint employment.
The risk of joint employment liability is an ongoing concern for franchisors. The franchise business model requires a level of control to ensure brand consistency and a uniform customer experience across locations. The American Franchise Act, if passed, would help to protect the franchise model and establish clear guidelines for what level of control is needed to create a joint employment relationship.
For three hours each night, a policeman appears out of thin air in a busy park in Seoul, South Korea. His presence has, according to police data, reduced crime in the park by 22%. The policeman, however, has never arrested anyone, and he doesn’t even move around the park.
That’s because he’s a hologram.
The police chief attributes the program’s success to “citizens’ perceived safety,” although I’m not sure why anyone would perceive themselves safer in the presence of a hologram. Maybe I should not be so cynical. If it works, it works.
A new federal bill seeks to increase employers’ perceived safety, but without holograms.
The Save Local Business Act, H.R. 4366, would amend the National Labor Relations Act (NLRA) and the Fair Labor Standards Act (FLSA) to create a uniform test for joint employer status. By adding a new joint employer test to the statutes, Congress would prevent the NLRB and DOL from trying to change the test every time there’s a new party in the White House.
The Act is a pro-business bill. If it passes, joint employer status would be much harder to establish.
Under the proposed text, joint employer status could exist “only if each employer directly, actually, and immediately, exercises significant control over the essential terms and conditions of employment of the employees of the other employer.”
“Essential terms and conditions” would mean, for example, “hiring such employees, discharging such employees, determining the rate of pay and benefits of such employees, supervising such employees on a day-to-day basis, assigning such employees a work schedule, position, or task, or disciplining such employees.”
The bill is sponsored by James Comer (R-Ky.). It was introduced July 14, 2025. Previous versions of the bill were introduced in 2021 and 2023. Obviously, they failed.
With Republicans controlling the House, passage in the House seems possible, but the likelihood of getting 60 votes in the Senate is pretty remote.
So the bill, while it seems good for businesses, is probably the legislative equivalent of a Korean holographic police officer. It looks nice but exerts no real authority.
This is Louie. He’s 11 weeks old. He has the teeth of a shark. If you play with him and there’s no toy in his mouth, your arm is the toy. Or your foot. Or sometimes your face. In my house, we all look like we just played with a blender. But he’s awfully cute.
Late last week, the Department of Labor (DOL) made some news that won’t bite companies in the face.
The Aztec Death Whistle is shaped like a human skull and produces a hideous shrieking sound, as if conjuring up 1000 piercing human screams. These whistles have been discovered in burial site excavations. Scholars believe that they played a role in warfare or burial ceremonies.
Either way, they make a pretty awful sound. Here’s a youtube video demonstration. Enjoy! 😳
Rep. Kevin Kiley (R-CA) hopes that two new bills will sound a death whistle to the confusing morass of independent contractor tests.
The Modern Worker Empowerment Act (MWEA) would codify the test for employee status under the Fair Labor Standards Act (FLSA) and the National Labor Relations Act (NLRA). The new test would create a two-part test. It would be a blend of the Right to Control Test and the Economic Realities Test.
An individual would be deemed an independent contractor if (1) the hiring party does not exercise significant control over how the work is performed, and (2) the person performing the work has the opportunities and risks inherent to entrepreneurship.
The bill would also prohibit consideration of certain facts, such as any requirement to comply with legal and safety standards.
The Modern Worker Security Act (MWSA) would create a safe harbor so that companies could provide portable benefits to independent contractors.
These laws would apply only to classification under the FLSA and NLRA. The bills do not attempt to modify the IRS’s Right to Control standard or any state law tests.
So are these bills a death whistle for the current IC tests?
Probably not. My Aztec-themed prediction device says the bills are not likely to become law. But I like the thinking. Any increase in clarity for the IC tests would be helpful to the business community.
Meanwhile, if you’d like to learn more about Aztec death whistles, there’s an actual study published in Nature that investigates the “Psychoacoustic and Archeoacoustic nature of ancient Aztec death whistle.” Here’s the link.
This Thursday, Feb 27 marks National Toast Day, an important annual celebration that commemorates this versatile form of bread. Toast for breakfast? Toast for brunch? Snack? PB&J? Is there anything toast can’t do?
National Toast Day is celebrated on the last Thursday of February each year, which means that this year it overlaps with National Polar Bear Day, National Strawberry Day, and National Kahlua Day.
Put all those things together and you’ve got one helluva picnic.
But why do I mention toast? Because of independent contractor classification tests, of course. Here’s what I mean.
Remember the 2024 DOL independent contractor rule — you know, the one that the Biden DOL passed in January 2024? We hardly had a chance to get acquainted.
I’ll tell you something that won’t surprise you. The Trump Administration is likely going to rescind it. Or maybe ignore it. Or maybe allow a court to reject it. One way or another, it’s gonna be toast.
There are several lawsuits challenging the 2024 rule, and one of them — Frisard’s Transportation v. US DOL — was scheduled for oral argument at the Fifth Circuit Court of Appeals in early February.
The DOL, however, asked the court to postpone oral argument to allow it time to consider how it wants to proceed. How it wanted to proceed under Biden was to defend the rule. Now, not so much.
However the case proceeds, we can expect that the Trump DOL will not apply the Biden Administration’s independent contractor test.
So what does that mean for the independent contractor test?
In reality, not much.
That’s because, first, the rule applied only to the Fair Labor Standards Act (FLSA), which is the federal wage and hour statute. It didn’t apply to tax law, benefits law, labor law, unemployment or workers’ comp law, or any state law.
And second, the test for who is an employee under the FLSA has always been an Economic Realities Test, and courts know what that test is. Every circuit court has a long line of case law describing the Economic Realities test. The courts don’t need the Biden or Trump Administration to tell them how to interpret the FLSA. The FLSA has been on the book since the 1930s, back when Biden and Trump were mere teenagers.
So what does this mean for employers? Again, not much. Employers should assume that under federal wage and hour law, the test for whether someone is an employee or independent contractor is the same as it has been for decades.
This anticipated change is not really going to change anything at all.
Now, if instead of toast, the Trump Administration made the rule into Kahlua, that would seem to be worth celebrating.
My impression of European electrical outlets is that they seem surprised, as if they don’t know what might be coming. I saw this one in our Airbnb in Lake Como.
Am I wrong? Didn’t think so.
The outlet should not be surprised at what’s coming. And DOL Acting Director Julie Su should not have been surprised either when she was issued a subpoena by the House Committee on Education and the Workforce.
The committee, chaired by Rep. Virginia Foxx (R-NC) has been at odds with the DOL for some time. In particular, Foxx et al. have doubts about the legitimacy of the Su-led DOL’s belief that independent contractor misclassification is rampant. The Committee believes that the DOL is being too aggressive in seeking to find misclassification in relationships that are, in reality, properly classified as independent contractor relationships.
In March, the Committee sent the DOL a series of inquiries about its enforcement efforts. But the DOL largely evaded the questions. After ongoing back and forth, the Committee has finally issued a subpoena to the DOL, demanding production of specific information about the DOL’s enforcement activities.
More specifically, the subpoena requests documents sufficient to show, since January 20, 2021:
The number of instances of misclassification that Wage and Hour Division (WHD) inspectors have found.
The number of misclassification enforcement investigations that WHD has initiated.
The number of misclassification enforcement investigations that WHD has jointly undertaken with the NLRB.
The number of misclassification enforcement investigations that WHD has jointly undertaken with the FTC.
Responses to the subpoena are due October 7th. I don’t expect we’ll see direct answers.
Snakes may have an eating disorder. Is cannibalism an eating disorder?
A wildlife technician for the Georgia Department of Natural Resources was searching for eastern indigo snakes, when he found a four-footer with an unusual appetite. Upon capture, the snake vomited up other snakes. The snake has eaten another indigo snake (no relation?), a rate snake, and possibly a rattlesnake, which may or may not have still been alive. Published reports of the incident are unclear about the rattlesnake.
Turning on your own species is not unique to snakes. We see independent contractors try that trick all the time. They’re content to be contractors until they decide they’re unhappy, at which point they sue and claim to have been an employee all along.
A recent Fifth Circuit case stood out to me for two reasons:
(1) The contractor had made previous statements, under oath, that he was self-employed. I wanted to see if the court would hold those against him.
(2) If the court applied the economic realities test, I wanted to see which version of the test it would use. Would the court apply the new DOL version of the test?
Here’s what happened. The Killick Group provides inspection services in the oil, gas, and energy industries. When the need arises for a job, the company engages third party independent contractor inspectors to perform the work.
One of those third party inspectors was Guillermo Gray. Gray was a certified welding and coding inspector with his own company. Gray sued Killick Group, alleging that he was an employee under the Fair Labor Standards Act (FLSA) and should have received overtime pay.
In defending the claim, Killick Group used past statements by Gray against him. In 2015, Gray was convicted of driving while intoxicated. When applying to secure a work-only driver’s license, he attested that he was “self-employed” as an inspector, and he listed his own company, Veritas Inspections, Inc., as his employer.
Killick Group argued that Gray was judicially estopped from claiming to be an employee, since he attested previously that he was self-employed. Killick Group also argued that Gray did not meet the test to qualify as an employee under the FLSA.
The trial court agreed with the judicial estoppel argument and granted summary judgment. On appeal, the Fifth Circuit had some concerns with the estoppel argument and decided to analyze the case under the FLSA.
The appeals court applied an economic realities test, considering five factors:
(1) the degree of control exercised by the alleged employer; (2) the extent of the relative investments of the worker and the alleged employer; (3) the degree to which the worker’s opportunity for profit or loss is determined by the alleged employer; (4) the skill and initiative required in performing the job; and (5) the permanency of the relationship.
The court determined that Gray was an independent contractor under the test.
Two things stand out to me about this case.
First, the Fifth Circuit did not consider the version of the test created by the DOL in its recent independent contractor regulation. The Fifth Circuit applied the same five-part test that Fifth Circuit courts had applied in the past.
Second, I wish the Fifth Circuit would have analyzed the judicial estoppel argument. Since the court determined that Gray was not covered by the FLSA, the court did not consider the judicial estoppel argument. I find the judicial estoppel argument intriguing, and I like it as a tool — if it will work. Independent contractors regularly assert that they have independent businesses, such as when taking tax deductions and filing a Schedule C. As an advocate for companies, I’d like to be able to use those assertions against an individual who later claims to be an employee. It would have been helpful to have Fifth Circuit case law supporting that argument.
Both of these takeaways are worth digesting. I will digest them more thoroughly than the indigo snake digested its meals, one of which may or may not have still been alive at the time of regurgitation. The mystery of what happened to the possibly-eaten, possibly-still-alive rattlesnake remains unsolved. I choose to believe it was eaten and lived. That makes for the better story.
But it’s not the farmers’ fault. While Iceland has fewer than 400,000 permanent residents, the country produces about six million cucumbers per year. This BBC article blames the shortage on the popularity of a cucumber salad recipe circulating on TikTok.
I could blame TikTok for many things, but probably not that. According to experts interviewed in the article, other factors may also be responsible, including seasonal crop rotation and school going back into session.
While this journalistic deep dive created more questions for me than it answered, a recent court decision made me a little more confident in answering an entirely different question.
Remember the DOL’s new independent contractor classification test? The one that went into effect in March 2024? The rule is being challenged in court, and a Fifth Circuit Court of Appeals decision in late August may provide a clue about whether the rule will survive.
This recent Fifth Circuit case was about a different DOL rule. It addresses a restaurant industry regulation that deals with the tip credit and minimum wage law. The court said that the DOL did not have the authority to add legal requirements that are not in the Fair Labor Standards Act (FLSA).
Why is this relevant to the independent contractor test? Because the DOL is essentially doing the same thing in both contexts.
With the independent contractor rule (like the tip credit rule), the DOL is setting up a new test with requirements that are not written into the FLSA. After the Supreme Court’s recent Loper Bright decision, which limits the authority of federal agencies, the DOL may have a much harder time getting courts to apply the DOL’s regulations. It would not at all surprise me if the courts ignored or rejected the DOL independent contractor rule. With or without a DOL rule, there are already decades of case law telling courts how to determine employee status under the FLSA. Federal judges don’t need the DOL to tell them what the test should be.
We’ll continue to watch what happens with the DOL independent contractor rule. You could grab a box of popcorn and watch things unfold slowly. Or maybe you prefer to shop for other snacks. Just don’t expect to find cucumber salad if you’re shopping in Iceland.
For now, businesses should assume that the DOL will apply its independent contractor test in its own enforcement actions, even if the courts may be more skeptical.
At a chess tournament earlier this month in Makhachkala, Russia, one competitor tried a new strategy. She (allegedly) smeared mercury on the board and chess pieces of her opponent before the match. There’s video. This seems a bit outside the rules. After her opponent began experiencing respiratory distress and tasted iron in her mouth, the Mercury Gambit proved not to be a long-term winning play.
The saboteur now faces criminal prosecution and a lifetime chess ban. So don’t try this at home.
The DOL is facing an array of gambits too. But these gambits are lawsuits, each trying to get a court to revoke the DOL’s recently adopted independent contractor rule. The rule went into effect March 11, 2024, and we wrote about it here.
I’m aware of four pending challenges to the rule, all in federal court:
In a Texas case brought by a coalition of business groups, the plaintiffs filed a brief July 1st arguing that under the Supreme Court’s Loper Bright decision, the DOL lacked authority to issue the rule. Coalition for Workforce Innovation v Su, E.D. Texas.
In a Georgia case filed by freelance writers and editors, the parties have filed cross-motions for summary judgment, all of which are still pending. Warren v Su, N.D. Ga.
In a Louisiana case, a family-owned trucking company sought a temporary restraining order to prevent the rule from taking effect. The motion was denied, and the plaintiffs intend to appeal. The court has stayed the case pending the appeal. Frisard’s Transportation v DOL, E.D. La.
In a Tennessee case, two writers filed suit to try to enjoin the rule, and the parties have filed cross-motions for summary judgment. Pittman v. DOL, M.D., Tenn.
When compared to mercury poisoning, court challenges really seem to be the way to go. I commend the strategy. Perhaps not as original, but tried and true.
The DOL’s 2024 independent contractor rule remains in effect for now, and businesses should structure their independent contractor arrangements to comply.
In this video, Muhammad Rashid of Pakistan, crushes 39 cans in 30 seconds. With his head. (I like the little fist pump he gives at the end.)
Why would a person do this? To get attention, I imagine. It caught my attention.
The House Committee of Education and the Workforce may also be trying to solicit a bit of attention, but I do want to know the answers to the Committee’s questions.
On August 8, they sent this letter to Acting Secretary of Labor Julie Su, asking her for information about the DOL’s enforcement activity under its new independent contractor rule. The Committee would like the DOL to answer three questions:
1) Since January 20, 2021, how many instances of misclassification have Wage and Hour Division (WHD) inspectors found? Please provide the total number of instances across each occupation that has been subject to investigation.
2) Please provide the number of misclassification enforcement investigations WHD has initiated for each specific industry sector since January 20, 2021.
3) Has DOL initiated any investigations related to misclassification based on its coordination with the National Labor Relations Board and the Federal Trade Commission? If so, please provide the number of investigations DOL has undertaken, broken down by each specific industry segment.
Committee Chair Virginia Foxx (R-not from Virginia) writes that she asked Su these questions when Su appeared before the Committee on May 1, but Su failed to answer. The letter begins by knocking Su around a bit, alleging that the DOL with its new independent contractor rule is trying to destroy all independent contractor relationships.
Maybe yes, maybe no. I don’t know where this letter falls on the continuum of publicity stunt vs. actual relevance for policy making, but I think these are good questions. It would be hopeful for businesses to know whether the DOL’s enforcement strategy has shifted since enactment of the new rule. And if so, how.
The Committee might get the answers it seeks, or it might just be banging its head against the wall cans. But it never hurts to ask.
What Mr. Rashid was doing, on the other hand, does hurt. Or it should hurt. And if it doesn’t hurt, then maybe that tells us something too. Also, I think Mr. Rashid owes someone the cost of 39 beers.
Who Is My Employee? 