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.
Read more here.
Originally published 5/5/25 as a BakerHostetler alert.
When animals flock together, we use strange collective names to describe them. You’ve heard of a flock of seagulls, a pod of whales, and a murder of crows. But did you know the collective nouns for apes, hippos, and wildebeests?
Fortunately, this wildlife writer does. It’s a shrewdness of apes, a bloat of hippopotamuses, and a confusion of wildebeests.
My favorite, though, is a parliament of owls. The phrase was apparently coined by CS Lewis in the 1950s and stuck. Good for the owls! I wish for them to form a strong government and pass wise laws.
When independent contractors flock together, we don’t really have a good word for that. Contractors generally can’t flock together for employee benefit plans since they’re not employees, even though some states have enacted portable benefits laws as models for what may be viable on a national level.
One impediment to companies providing contractors with benefits is that doing so can be evidence of an employment relationship. Companies are perversely incentivized not to help contractors remain self-sufficient because companies don’t want to risk misclassification claims.
That could change with a national portable benefits bill.
There has been interest for a long time among trade associations and small business groups to allow portable healthcare and retirement benefits for independent contractors. A recently released white paper by Sen. Bill Cassidy, Chair of the Senate Health, Education, Labor, and Pensions (HELP) Committee, advocates for a national portable benefits bill.
The white paper proposes various options for providing affordable health care options for independent contractors, including association health plans, health reimbursement arrangements, pooled employer plans, and single employee pension IRAs. For these programs to work, Congress would have to ensure that a company’s participation in such plans is not a factor in determining whether the contractor receiving such benefits is misclassified.
The concept of portable benefits for contractors is one that should have bipartisan support. The main obstacle to such a bill is likely the desire by some for contractors to receive all of the benefits of employees, and so this concept (for them) is only half a loaf.
Once upon a time, we used to have a Congress that would consider half a loaf to be better than no loaf at all. My hope is that legislators will find a way to make this concept work.
It would be wise. Something that a parliament of owls could probably get done.
© 2025 Todd Lebowitz, posted on WhoIsMyEmployee.com, Exploring Issues of Independent Contractor Misclassification and Joint Employment. All rights reserved.
Two London police officers had to get creative to break up a gambling ring that was profiting off tourists on Westminster Bridge. The gambling rings would target tourists by setting up rigged games. Police would break up the games, but the wrongdoers learned to tell when the police were coming.
Cue the dynamic duo!
Police officers dressed as Batman and Robin mingled with the crowds, then struck when the time was right. Or as Mr. Kim might say, Sneak attack.
Companies retaining independent contractors can avoid needing to sneak attack if they set certain ground rules up front. One of these important ground rules relates to ownership of IP.
Intellectual property created by a non-employee is not automatically a work made for hire under US copyright law. Instead, an assignment of inventions clause is needed.
Ensuring that your own the contractor’s creations and the IP rights can be critical to getting the benefit of why you retained the IP. Consider the contractor who writes computed code or creates copy for your website. You want to own that IP.
(Or sometimes, like with an IC photographer, you might want to license it and allow the photographer to retain the copyright. But either way, you need to consider these issues in advance.)
But don’t wait until the protectable IP has been created to seek the assignment. Do it up front, in your independent contractor agreement.
Use a present assignment clause. The clause should say that any works created by the contractor and any IP rights arising out of those works are automatically assigned by the contractor upon creation, with no further affirmative act needed to effectuate the assignment. Do not merely say that the IP will be assigned, because that requires future action.
If you plan ahead with a proper assignment clause, you can avoid later trying to chase down the contractor for an assignment of the IP, which may already have been embedded into vital company property, such as computer code. Chasing down a contractor later might be easier than breaking up a gambling ring, and you might not even have to dress up as a superhero or his trusty sidekick.
© 2025 Todd Lebowitz, posted on WhoIsMyEmployee.com, Exploring Issues of Independent Contractor Misclassification and Joint Employment. All rights reserved.
A man was detained at Newark International Airport earlier this month for concealing a live turtle in his pants.
The turtle was detected as the man passed through TSA screening. When questioned about the bulge in his groin area, the man said he was just happy to see the TSA agent. No, that’s not what happened at all. Instead, the man reached into his pants and pulled out a 5-inch long red-ear slide turtle.
It is unclear whether the turtle was a pet and whether the man was charged. But he did miss his flight. So let this be a lesson to all of us.
Meanwhile, in California, an in-home healthcare agency learned the hard way that it was concealing a much larger problem. And this problem cost it $2.3 million in fines.
As explained in this news release from the Department of Industrial Relations (DIR), the agency had been classifying its in-home healthcare aides as independent contractors, not employees.
After receiving a complaint, the DIR investigated and found that under California law, the aides should have been treated as employees. The Labor Commissioner issued citations under a relatively new section of the California Labor Code, making this the first enforcement action in which the civil penalties for misclassification were collected as damages for the affected workers, rather than as a penalty paid to the state. (How generous, California!)
This enforcement action is an important reminder of three things.
First, when the work performed is within the company’s normal course of business, the workers are probably going to be deemed employees under California’s ABC Test (unless one of several exceptions applies). California law makes it very difficult to retain solo workers as independent contractors if you retain them to perform a core business function.
Second, in-home health care is an industry in which misclassification maybe widespread, especially when applying California law. The business of in-home healthcare is to provide in-home healthcare. It’s difficult to say that those who do the work are not employees.
Finally, this action illustrates the breadth and depth of penalties a company can face for misclassifying its workers. The $2.3 million in penalties here included:
When a company treats its workers as contractors, it’s not following the laws that would apply to employees. If, by law, the workers were misclassified, then there are a whole lot of employment laws that the company was almost certainly not following. That makes for a lot of damages.
The advice here is the same as always. Companies using indepednent contractors should be proactive in evaluating these relationships and whether they can survive a legal challenge. There are almost always things that a company can do to better solidify its workers’ status as independent contractors. The best time to act is before an investigation or lawsuit begins.
Complacency is no defense. The fact that you’ve been doing it this way for years and haven’t been sued only means that you haven’t been sued yet.
In other words, if there’s a turtle in your pants, there’s a good chance you get caught at some point, so you better have a good explanation prepared in advance.
© 2025 Todd Lebowitz, posted on WhoIsMyEmployee.com, Exploring Issues of Independent Contractor Misclassification and Joint Employment. All rights reserved.
From mid-January to mid-February, I spent four weeks working remote from New Zealand’s South Island. It’s an astoundingly beautiful place, and I loved the experience. One experience I apparently missed out on, however, was seeing the now-famous blobfish.
The gelatinous blobfish lives at depths of 2,000-4,000 feet, a visit to which was not on my itinerary. But if it had been, I might have seen the 2025 Fish of the Year, as named by New Zealand’s Mountain to Sea Conservation Trust.
Its odd appearance is apparently caused by bringing the fish to the surface. In its deep sea habitat, the pressure causes it to look rather like a normal fish. So if you were deep in the sea, you might not have treated the blobfish any differently than its neighbors.
A recent federal court decision serves as a good reminder about the dangers of treating someone differently — in a way you might not have expected.
A recruiting firm was working with a candidate who had been threatening to sue her former employer for discrimination. The recruiting firm advised her against it and, when she sued anyway, it dropped her as a client.
But recruiting, staffing, and other firms can work with whomever they want, right? Generally yes, but they cannot decline to engage someone for an unlawful reason.
Title VII of the 1964 Civil Rights Act allows employees to assert their legal rights opposing discrimination and protects them against retaliation. The protection against retaliation extends beyond the company being sued. Another potential employer — or recruiting firm, or staffing firm, or even a company considering engaging the person as an independent contractor — cannot retaliate against that person for having asserted protected legal rights.
The lesson for recruiting, staffing, and other firms is this: Do not turn someone away for the sole reason that the person sued a former employer. That may be in violation of federal law.
In the federal case described above, the court denied a motion to dismiss by the recruiting firm, holding that the firm could potentially be liable for retaliation if the reason it declined to work with the individual was because she had asserted her federal protected rights under Title VII.
Like the blobfish, this seems like an ugly outcome for businesses. But also like the blobfish, if you go a little deeper, everything appears somewhat normal. If an individual was truly discriminated against, that person should not be punished for being a victim. That’s the theory anyway. We all know there are lots of meritless discrimination lawsuits. The anti-retaliation protections of Title VII extend to claims brought in good faith, even if the plaintiff doesn’t win.
© 2025 Todd Lebowitz, posted on WhoIsMyEmployee.com, Exploring Issues of Independent Contractor Misclassification and Joint Employment. All rights reserved.
In Canadian folklore, the Wendigo is an evil creature that can possess humans and turn them into cannibals. Wendigos cannot control their bloodlust and will even eat their loved ones, according to facts.net. The term “Wendigo Psychosis” has been used to describe a psychiatric condition in which patients experience intense desires to eat human flesh.
And that brings us to Trump’s executive orders on DEI.
On Friday, the Fourth Circuit Court of Appeals lifted a nationwide injunction that stalled enforcement of Trump’s DEI orders. The injunction was lifted for technical legal reasons, not because of policy reasons. In fact, two of the three judges wrote concurring opinions to show their support for DEI initiatives, even though they agreed the injunction should be lifted.
In one concurrence, Judge Albert Diaz expressed his frustration that they were unable to address the real substantive issue, referring to DEI initiatives (which he favors) as“a monster in America’s closet.” But hopefully not a Wendigo.
So how do the DEI orders affect independent contractors, and what should businesses do?
First, every business should be conducting an overall DEI audit right now. Programs and initiatives that overtly favor one group need to go. Scholarships and internships available only to certain racial or ethnic groups should be changed. Hiring quotas or targets must be removed. There’s a lot of gray area too, and there are a lot of things we are doing for clients in this area, but this post isn’t about DEI audits, so I’ll stop there.
Second, here’s what to look for with contractor relationships:
The attack on DEI is real, and companies who rightly remain committed to ensuring fair opportunities for all need to evaluate how they are seeking to achieve these goals. The government has an appetite for consuming companies whose DEI initiatives go too far. Like the Wendigo.
© 2025 Todd Lebowitz, posted on WhoIsMyEmployee.com, Exploring Issues of Independent Contractor Misclassification and Joint Employment. All rights reserved.
Image from https://www.giantbomb.com/wendigo/3005-21605/images/
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.
© 2025 Todd Lebowitz, posted on WhoIsMyEmployee.com, Exploring Issues of Independent Contractor Misclassification and Joint Employment. All rights reserved.
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.
© 2025 Todd Lebowitz, posted on WhoIsMyEmployee.com, Exploring Issues of Independent Contractor Misclassification and Joint Employment. All rights reserved.
They paved paradise and put up a parking lot.
When Joni Mitchell wrote “Big Yellow Taxi,” she had just arrived in Honolulu. She was inspired by the view outside her hotel window, with beautiful green mountains in the distance and, closer to the hotel, a “parking lot as far as the eye could see.” Ugly.
For business owners, the beautiful green mountains are successful business operations, with the business having been built the way you wanted and cultivated over a number of years. Paving over that paradise with a parking lot is the government coming in and forcing you to change how you do business. Ugly.
That’s what is happening to companies that rely on independent contractors but aren’t deliberate enough in how they set up their IC relationships. Looking back at 2024, here’s what I mean, with two specific examples.
Two companies with nationwide operations were forced to convert all independent contractors to employees, at least those working in California.
WorkWhile and Qwick provide gig workers to fill empty shifts. Qwick operates in the hospitality industry, and WorkWhile operates across multiple fields, including manufacturing, hospitality, and general labor.
The companies treat the gig workers as independent contractors. The City of San Francisco sued each company on behalf of the State. The lawsuits alleged that the gig workers were misclassified and should have been treated as employees under California law.
In 2024, both companies settled. Each agreed to pay a seven-figure settlement and to reclassify all gig workers as employees. (Press releases are here and here.)
Before the lawsuits, both companies had operated their businesses this way for years. They didn’t get sued and didn’t have to reclassify the contractors — until they did.
This case is a good reminder of two important rules.
1. Just because you have been doing it this way for years doesn’t mean it’s lawful.
2.The fact that you haven’t been sued means only that you haven’t been sued yet.
Before the lawsuits were filed, the companies had options.
They could have been proactive about changing the facts of the relationships and the contracts. They could have molded the facts the way they wanted without government oversight, in a way that would better insulate them from misclassification claims. This would have been difficult in California, with its strict ABC Test, but not impossible. But it would have taken hard work and a willingness to make changes proactively.
Or they could have converted their contractors to employees, but done it on their own terms, without the government telling them how they have to operate their business.
Now, as part of their settlements, these companies are forced to allow the government to monitor and dictate how they interact with these workers.
Don’t it always seem to go / that you don’t know what you’ve got ‘til it’s gone?
Once the government is monitoring how you do business, you’ve lost the flexibility to adapt and build on your terms. It’s too late. The time to act is before you get audited, investigated, or sued. See Rule #2.
© 2024 Todd Lebowitz, posted on WhoIsMyEmployee.com, Exploring Issues of Independent Contractor Misclassification and Joint Employment. All rights reserved.
There have been many notable Bills in rock music. There’s Billy Joel, Billy Idol, and Billy Ocean. Remember Billy Ocean? “Carribean Queen”? Subtitled “(No More Love on the Run).” Billy O gave us this ridiculous video that screams 1980s and includes such bad lip synching that you know, right away, he never could have pulled off a Milli Vanilli.
There’s another Bill that some businesses need to be aware of, including those that are working with independent contractors.
New York City requires businesses to post and to provide all employees the new Worker’s Bill of Rights, which includes information that applies mostly to employees but also, in some cases, to independent contractors. There is no separate requirement, however, to provide the Bill of Rights to independent contractors.
Independent contractors’ rights addressed in the notice include anti-discrimination, anti-harassment, and Freelance Isn’t Free Act rights.
Restaurant delivery app drivers also have enumerated rights, including that the app companies must:
The Bill suggests contacting the NY State DOL if you recognize that you may have been misclassified as an independent contractor. The notice doesn’t tell contractors how they might recognize misclassification.
You’d probably recognize most of the Bills in rock that I listed above, but the award for most recognizable Bill in rock goes to Billy Gibbons, guitarist and vocalist for ZZ Top. Yes, he has one of the band’s two fantastic beards, the other belonging to the late Dusty Hill.
Fun fact about ZZ Top: The only band member without a fabulous beard was the drummer. His name? Frank Beard.
© 2024 Todd Lebowitz, posted on WhoIsMyEmployee.com, Exploring Issues of Independent Contractor Misclassification and Joint Employment. All rights reserved.
Who Is My Employee? 