NLRB Shifts to Republican Majority; Change in Joint Employment Doctrine Is Likely

NLRB joint employment william emanuelWatching the National Labor Relations Board is like riding a see-saw (a very slow one, and not a very fun one, but stay with me here).

Board members serve five-year terms and, when they expire, the President has the right to appoint a successor, with confirmation by the Senate. Predictably, under Democratic administrations, the Board tips toward union workers’ rights, and under Republican administrations, the Board tips toward protecting businesses.

With the late September confirmation of William Emanuel to the Board’s fifth (and tie-breaking) seat, the see-saw tipped back toward the side of protecting businesses.

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Congress May Rewrite “Joint Employment” Definition

IMG_1092Congress may finally provide some clarity in determining who is a joint employer. In legislation introduced last week, the House proposed a bill that would rewrite the definition of “joint employer” under federal labor law (National Labor Relations Act) and federal wage and hour law (Fair Labor Standards Act).

The Save Local Business Act — despite lacking a fun-to-say acronym — would create a new standard for determining who is a joint employer under these two laws. The proposed new standard would allow a finding of joint employment “only if such person [business] directly, actually, and immediately, and not in a routine and limited manner, exercises significant control over the essential terms and conditions of employment….”

The definition provides examples of what are “essential terms and conditions,” including: Continue reading

When an Employee Double-Dips On a Paycheck, Who Pays?

Remember this?

Suppose the chip is a check, and the employee tries to cash it twice? Who would you rather be, Costanza or Timmy?

Staffing agency clients are increasingly pointing to a fraud committed by disloyal short-term employees. They cash a paycheck on their mobile app, then deposit the paper check a second time for duplicate payment. The check clears twice. Who must pay?

While this problem can arise in many scenarios, including with regular W-2 employees, it seems to be occurring more frequently with staffing agency employees, PEOs, temps, and other short-term workers. So let’s take a look.

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Joint Employment Is Like Taking Steroids By Accident

athlete-joint employment - staffing agency - 1840437_1920It seems like every month another professional athlete is caught using a prohibited substance. The typical script (after getting caught) is to blame the maker of a supplement. “I should have more carefully checked the label,” or “I had no way of knowing what was in that synthetic elephant urine.”

Fair or unfair, every athlete knows that he/she is responsible for what goes into the athlete’s body, whether the juicing was intentional or not.

The same rule applies to companies who use staffing agencies.

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The Myth of “Temporary Employees”

IMG_1067What is a “temporary employee”? I have practiced employment law for 20 years (Note to self: Keep practicing; someday you’ll get good at it.) and I can’t tell you. It’s a state secret. All lawyers have been sworn to secrecy forever.

Either that or, if you really want to know and say “pretty please” (with or without sugar on top, but no artificial sweetener please), that term has no legal significance. Usually the term is used to mean one of two things:

  1. your employee, hired on a trial basis with some sort of probationary period; or
  2. a staffing agency worker, retained to augment staff levels on a temporary basis.

Under option 1, the “temp” is a regular W-2 employee of yours, probably employed at will like your other employees, but whether you call that person “temp” or “permanent” or “regular” or “irregular” (?), none of it matters. A temp worker who is your employee, paid subject to deductions, is your employee.  Temp time counts toward FMLA eligibility. Continue reading

Trump’s Tax Plan Is Great News for Independent Contractors! Here’s Why.


[Important Note to Readers, 1/15/18: This post is dated May 2017, before the final tax plan was passed, and the final version is slightly different than described in this post. For a revised 2018 analysis based on the final tax bill, click here.]

President Trump’s tax plan, released last week, is great news for independent contractors. Contractors may be able to cut their tax rates by half (or more) by creating an entity, instead of contracting as an individual. Indirectly, this would help companies who use contractors as well. Here’s why:

Benefit to Individuals:

For individuals, the proposal would reduce personal tax rates modestly. An individual being paid as an independent contractor will likely see a reduction in marginal tax rates, but the range is likely to remain somewhere between 25% and 35%, depending on income level.

For individuals being paid through their homemade entities, however, the proposal could result in substantial savings. Currently, pass-through entities like LLCs pay taxes at the rate of the individual. The sole owner of an LLC would pay taxes on the LLC’s profits at the individual’s personal income tax rate, likely between 25% and 35%.

Under the proposal, however, pass-through entities such as LLCs and partnerships would instead be taxed on pass-through business income at 15%. That’s a sizable savings compared to 25-35%. [Note 9/29/17: Latest proposal would tax entities at 20%, not 15%, but there’s still a long way to go before any of this becomes law.  And it may never become law.  For now, it’s just a proposal.]

If this proposal passes, individual independent contractors will have a strong financial incentive to incorporate. Creating an LLC is relatively inexpensive. If it leads to Continue reading

Avoid this ADA Trap When Using Staffing Agency Workers

ADA staffing agency reasonable accommodation ambulance-2166079_1280ADA Quick Quiz: Your company uses staffing agency workers. A staffing agency worker discloses a medical need and asks for a reasonable accommodation — maybe a computer screen reading program, or an ergonomic chair, or a modified work schedule.

1. Which company must have the interactive conversation to determine what reasonable accommodation is appropriate?

(A) Your company
(B) The staffing agency
(C) Both

2. Which company is obligated to provide the reasonable accommodation?

(A) Your company
(B) The staffing agency
(C) Both

3. Which company is obligated today for the reasonable accommodation?

(A) Your company
(B) The staffing agency
(C) Both

Answers: Continue reading