Labor Dept Withdraws 2015-16 Joint Employment, Independent Contractor Guidance

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Did the new Labor Secretary of Labor finally throw employers a bone? I think so, but it’s too early to tell whether it’s delicious bacon-flavored or some generic processed meat flavor.

On June 7th, the Department of Labor (DOL) announced it was withdrawing the 2015 and 2016 informal guidance on joint employment and independent contractors.

Read the full post here, on BakerHostetler’s Employment Law Spotlight blog.

Unpaid Internships: Six Tips For Avoiding Minimum Wage Requirements

student unpaid internship frog-1339892_1920It’s summer intern hiring season. Can your interns be unpaid? If you pay them something, can you pay a small stipend that amounts to less than minimum wage?

Wage and hour laws dictate when a summer intern must be paid like a regular employee, with a required minimum wage and eligibility for overtime. Seasonal amusement and recreational establishments (such as summer camps or some amusement parks) may qualify for a special exemption, but this post is focused on more conventional year-round businesses.

Here are six tips for maintaining unpaid internship status: Continue reading

Are Independent Contractors Exempt from the FLSA?

hurry-FLSA-independent contractor -2119711_1920Sort of. The Fair Labor Standards Act (FLSA) covers only employees, not independent contractors. The FLSA’s requirements on minimum wage and overtime, therefore, do not apply to independent contractors.

But wait, dear reader, don’t click away quite yet! There’s more! The real question is whether your independent contractor is really an independent contractor.

The question of Independent Contractor vs. Employee is determined under the FLSA by applying an Economic Realities Test to the facts of the relationship, not by deferring to how the parties have characterized they relationship.

The Economic Realities Test evaluates whether the worker is economically reliant on the company for which services are being provided, as opposed to in business for himself/herself.

I have written about the Economic Realities Test here, walking the reader through the various factors that courts and the DOL use to determine Who Is My Employee? under the FLSA.

The bottom line: A true independent contractor is not covered by the FLSA, but an Economic Realities analysis must be applied to determine whether a worker is truly an independent contractor.

Can You Pay a Contractor Overtime? Should You?

independent-contractor-questionsLet’s talk about good old-fashioned 1099 Independent Contractors — you know, those individuals who are happy to be called contractors until they’re released and then decide they should have been treated as employees.

When retaining a contractor, one of the goals, of course, is to ensure that the contractor is properly classified and is not really (factually) an employee. A secondary goal, however, is to limit liability if the contractor is misclassified.

Today’s question sits at the intersection of these two goals. Continue reading

What is the Economic Realities Test?

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The Economic Realities Test seeks to determine whether, as a matter of economic reality, the worker is reliant on the hiring party, or is in business for him/herself.

The Fair Labor Standards Act (FLSA) uses an Economic Realities Test to determine whether a worker is a contractor or an employee.  If the worker is an employee under this test, then the federal minimum wage and overtime rules apply, subject to any exemptions.  This test is also used to determine who is an employee under the Family and Medical Leave Act (FMLA). Continue reading