The Dishes Go Where? NLRB Reverses Major Joint Employer Ruling. Again.

text8-1-2020

– Me, to my mostly adult kids, on Friday (and the day before that, and the day before that, and the day before that…)

The text above should be no surprise to any of you who have elected to reproduce. Our offspring live in the stone ages. They do not understand the concept of an electric dishwasher. They are pre-Edison old school. If everything goes in the sink, they know that I will be the washer of the dishes.

For years, I have been sending the same message, usually face-to-face. It never gets through. But I keep trying and maybe, just maybe, one day we’ll get to the right result.

Same goes for the National Labor Relations Board and its repeated efforts to unravel the 2015 Browning-Ferris decision on joint employment.

Ah, yes, remember the Browning-Ferris case? Remember how in 2015, the Dem-controlled Board tried to rewrite the test for joint employment? The Board rejected 30 years of Board law and decided that indirect and reserved control would be enough to make someone a joint employer.

In 2017, the Board later tried to undo the Browning-Ferris decision but failed and — sorry, my bad — had to reinstate it. The case went to the Court of Appeals and then came back to the Board. But the Board it came back to is a more pro-business, Republican-controlled Board than the 2015 Board that issued the original decision.

Last week, the Board (for a second time) retracted the 2015 Browning-Ferris ruling. This time, the Board ruled that it had been “manifestly unjust” for the 2015 Board, after making up its new test, to apply that new test retroactively to Browning-Ferris Industries.  Cheers to that!

In last week’s ruling, the Board did not formally revoke the 2015 test, but it didn’t have to.

That’s because in February 2020, back in an era when mankind could roam the earth freely without hiding their lips, the Board issued a new test. The new test requires direct and immediate control before a company can be deemed a joint employer.

More information about NLRB’s new test is here, including a Q&A. For now, this is the test for joint employment under the National Labor Relations Act. A finding of joint employment requires direct and immediate control.

Before you go back to your home office all content and happy that you learned something already today and it’s not even coffee o’clock yet, remember — the NLRB test is not the full story when it comes to joint employment. The DOL has a different test for Fair Labor Standards Act (FLSA) disputes, summarized here.  And the courts may or may not apply either of these agency-created tests. As discussed here, there’s a lawsuit filed by 18 states that challenges the legitimacy of the DOL test.

So the Browning-Ferris case may be finally done (or maybe not). At least for now, it seem done. But what’s not done is the jousting and pivoting over the various tests for determining who is a joint employer. That battle rages on.

Much like my personal battle to fill the dishwasher at home.

© 2020 Todd Lebowitz, posted on WhoIsMyEmployee.com, Exploring Issues of Independent Contractor Misclassification and Joint Employment. All rights reserved.

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Silver Linings? DOL Looks to Adopt New Independent Contractor Test Before Year End

canoe

The past few months have included many silver linings — more family time, a Lake Michigan vacation, and professional cornhole on TV. I’ve also learned new things — governors have more power than I thought, remote work is more doable than many of us thought, and there’s such a thing as professional cornhole.

Now the Department of Labor wants us to learn something new too — about independent contractor status. (Too many long dashes so far? I’m flagging myself for excessive use.)

Last week the DOL published a notice that it intends to fast-track a new regulation covering the test for independent contractor vs employee under the Fair Labor Standards Act.

What would that test look like? The DOL gave no hints, but here is my educated guess.

The test for independent contractor status under the FLSA is an Economic Realities Test.  That is a court-created test, it’s well-established, and it’s not likely to change. If the DOL did try to change it, I don’t think the courts would follow the new regulation anyway. So the DOL is going to have to work more around the edges.

I expect the regulation to define more precisely the factors to be taken into account under the Economic Realities Test. Right now, different courts use different versions of it. Some uniformity would be helpful.

I also expect some examples to help illustrate how the factors should be applied. Look for sample fact patterns that seem like close calls but perhaps would be deemed supportive of independent contractor status under a new DOL interpretation.

We can expect the DOL will gently place its fingers on the scales, making it a bit easier to maintain independent contractor status under the FLSA. Don’t expect a full rewrite of the test.

The DOL will want to implement the new rule quickly, in case a new administration takes over in January. Look for a proposed regulation shortly, a quick public comment period, and a new regulation on the books late this year.

Hopefully by the time we see a final rule, we can watch real sports on TV and demote cornhole to livestream only. That way both people who care could still watch.

© 2020 Todd Lebowitz, posted on WhoIsMyEmployee.com, Exploring Issues of Independent Contractor Misclassification and Joint Employment. All rights reserved.

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New Joint Employment Decision: Poo Paint or Just Poo?

poo rainbow

Sitting outside this weekend I was thinking about things I wish I had when my kids were toddlers, things that would have helped to keep them occupied. The first things that came to mind were all electronic — iPhone, iPad, Netflix. But then I came upon this. And it’s good that I didn’t know about it a decade ago.

https://www.poopaint.net/home-1

From the website:

Inspiration found in a bathroom stall!
PooPaint allows kids to wipe using toilet paper that feels as if they were playing with a colouring book.
Making potty time into a positive and fun experience!

Yes, my friends, it’s a coloring book for poo, like color by numbers but with only one color — brown. Or maybe for some, a beautiful mahogany. Square 3 is an exact reproduction of Cleveland winters: fill in the whole page, leaving gray at the top for sky.

Anyway, the case I want to talk about today is a joint employment case from the Sixth Circuit Court of Appeals. For potential joint employers, the decision is like potty time with poopaint — “a positive and fun experience!” For workers, it’s just poo.

In this case, a physical therapist assistant named Thomila worked in a nursing home. The operator of the nursing home contracted with a third party to provide staff.  The third party did the hiring, firing, controlled pay, provided benefits, supervised the workers, and scheduled them.

Thomila worked for the third party. At one point Thomila accused her supervisor, also a third party employee, of sexually harassing her. The third party investigated and fired him. So far, so good.

But then the nursing home operator — which apparently liked the supervisor — decided that Thomila was no longer a “good fit” for the nursing home and asked the third party to remove her. It did.

Thomila sued the nursing home operator, claiming that its request to remove her (after she complained of sexual harassment) was retaliation in violation of Title VII. Although she was employed by the third party, she claimed that the nursing home operator was a joint employer and therefore could be liable under Title VII’s anti-retaliation rule.

But the case was thrown out on a motion for summary judgment. The court ruled that the nursing home operator was not a joint employer under the test used for determining joint employment under Title VII.

The test for joint employment under Title VII is whether the alleged joint employer has the ability to:

  • Hire and fire,
  • Discipline,
  • Affect compensation and benefits, and
  • Direct and supervise performance.

(At least, that’s the test in the Sixth Circuit, which includes OH, MI, TN, and KY. You’d think the test would be the same everywhere since this is a federal law, but it sometimes varies a bit.)

Anyway, back to Thomila. The third party controlled all of these things, so the nursing home operator was not a joint employer. Since it was not a joint employer, it has no duty to Thomila under Title VII. The anti-retaliation provisions in Title VII did not apply. Case dismissed.

Thomila tried one other claim too, and this may have been her stronger argument. She alleged that by firing her, the nursing hone operator interfered with her access to employment opportunities. That’s a separate kind of claim. But the court ruled that the nursing home operator was not liable under that claim either, since the third party had offered Thomila other placement opportunities (but all were out of state). On this claim, the decision was 2-1, with the dissenting judge arguing that the interference claim should have been allowed to go forward. The interference claim does not require a finding of joint employment.

The lesson here for employers is that the test for joint employment is technical. The facts matter a lot. The risk of joint employment can be minimized if the relationship is carefully structured so that the third party retains control over the factors listed above. The contract should be drafted carefully, detailing who is responsible for what.

A poorly drafted contract is not worth the paper it’s written on. Kind of like that specific kind of paper advertised here as “Inspiration found in a bathroom stall!” And that should not be the kind of paper you’re looking for when drafting your contracts.

So draft wisely and, for “a fun and positive experience!“, choose your paper carefully.

© 2020 Todd Lebowitz, posted on WhoIsMyEmployee.com, Exploring Issues of Independent Contractor Misclassification and Joint Employment. All rights reserved.

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New Rules for Drivers? California’s ABC Test Could Change Again in 2021

Worst parking.jpg

Rebellious? Indifferent? Clueless? I’m still trying to understand how this car thought it was ok to take up FOUR parking spaces in the parking lot at a Walgreens near my house.

Any one of the spaces seems suitable for a car of ordinary proportions. I have parked in most of these four spots before, and my experiences were uniformly positive. I’d give four stars to each spot. Reliable, met expectations. Near enough to the store entrance. Picking just one of the four would be an excellent way to start your shopping experience.

When people don’t like the rules they’re expected to follow, one approach is to try to change the rules. That’s what ride share and delivery app companies are doing in California.

Late last month, these companies achieved an important milestone, reaching the 625,000 signature threshold for a November ballot initiative that, if passed, would change the test in California for determining Employee vs. Independent Contractor. The measure will now appear on California ballots, giving voters the chance to override A.B. 5 for ride share and delivery app companies.

If the initiative passes, the new ABC Test would not apply to workers in the app-based rideshare and delivery business. Instead, those workers could stay classified as independent contractors, but the app-based companies must ensure that the drivers receive a predetermined level of compensation and benefits, including:

  • Earnings Minimum. The measure would require app-based companies to pay at least 120 percent of the minimum wage for each hour a driver spends driving—but not time spent waiting for requests.
  • Health Insurance Stipend. The measure would require rideshare and delivery companies to provide a health insurance stipend of about $400 per month to drivers who regularly work more than 25 hours per week (not including waiting time). Drivers who average 15 driving hours per week but less than 25 driving hours would receive half as much.
  • Medical Expenses and Disability Insurance. The measure would require that companies buy insurance to cover driver medical expenses and provide disability pay when a driver is injured while driving.
  • Rest Policy. The measure would prohibit drivers from working more than 12 hours in a 24 hour period for a single rideshare or delivery company.
  • Other. The measure would require that rideshare and delivery companies have sexual harassment prevention policies and conduct criminal background checks and safety training for all drivers. It also would prohibit discrimination in hiring and firing.

The measure would also prevent cities and counties from passing further restrictions on driver classification.

I wrote more about this bill here, leading the post with a harrowing flight selection option offered on my United app.

So if you‘re reading this post from the Left Coast, get out and vote in November. You can make a meaningful change in the way that California approaches the question of Who Is My Employee? In the meantime, drive safe, wear your mask, and park within the lines.

© 2020 Todd Lebowitz, posted on WhoIsMyEmployee.com, Exploring Issues of Independent Contractor Misclassification and Joint Employment. All rights reserved.

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Worried about ABC Tests? Here’s What You Have to Look Forward to.

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Recent coronavirus-related conversation in my house, after cancellation of planned spring break vacation, loss of kids’ summer internships, suspension of in-person college classes, and more than one day of snow in May:

Lisa: This is getting ridiculous. We need something to look forward to.

Me: 2021?

It may feel like there’s not much to look forward to lately, but if you’re into watching state bills on independent contractor misclassification, I’ve got some exciting news for you! Not really. No one’s into that. But I’m going to share anyway.

Seven states are currently considering bills that would adopt strict ABC Tests for determining whether someone is an employee or an independent contractor. What do I mean by “strict ABC Tests”? I mean the same test California recently adopted in Dynamex and under Assembly Bill 5. I mean the test where anyone performing services is presumed to be an employee unless all three of these things are proven, with part B being the hardest to meet:

(A) the worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact, and 

(B) the worker performs work that is outside the usual course of the hiring entity’s business, and 

(C) the worker is customarily engaged in an independently established trade, occupation, or business.

So which states are vying for the title of Miss California? Here are the 7 states with bills currently pending that, if passed, would adopt a strict ABC Test:

  • Massachusetts – would expand test to unemployment
  • Michigan
  • Minnesota
  • New Jersey – switching from looser part B
  • New York
  • Pennsylvania – for gig-based platforms only
  • Rhode Island

I’ll continue to minor these bills, mainly because I know no one else wants to. But at least we all have something to look forward to.  Happy new year?

© 2020 Todd Lebowitz, posted on WhoIsMyEmployee.com, Exploring Issues of Independent Contractor Misclassification and Joint Employment. All rights reserved.

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Did a State Supreme Court Just Rewrite a Key Definition in Independent Contractor Misclassification Law?

knowtherulesFor businesses using independent contractors and concerned about misclassification claims, there hasn’t been too much to get mad about lately. As of last week, I’m just mad about saffron. (She’s just mad about me.)

But a recent decision by the Pennsylvania Supreme Court may change that. The PA Supreme Court just took a commonly used phrase in Employee vs. Independent Contractor tests and gave it a new meaning. (Fun fact about change: If you change your name, you probably can’t include a numeral or punctuation.”)

Under PA unemployment law, anyone receiving pay is an employee for unemployment insurance purposes, unless the individual is (a) free from control and direction, and (b) customarily engaged in an independently established trade, occupation, profession or business. Traditionally, that’s a test that’s been considered pretty easy to meet. Maybe not anymore.

Addressing part (b), the PA Supreme Court ruled that to be “customarily engaged in” an independent business, the individual must — right now — “actually be involved, as opposed to merely having the ability to be involved, in an independently established trade, occupation, profession, or business.”

The Court looked to see whether the contractor actually operated his/her own business. Merely being allowed to do so wasn’t enough. It may still be enough if the contractor advertises his/her services to the public, even if a contractor doesn’t have other customers at that particular time. But the contractor needs to take some affirmative steps that show that the contractor is — at that time — “actually involved” in an “independently established trade, occupation, profession or business” at the same time the contractor is being paid by whatever company doesn’t think that worker is its employee.

If this “actually engaged” standard is applied in other states, it may make it harder in other states to maintain independent contractor status. States that have a similar “customarily engaged in” requirement in one or more of their misclassification tests include:

  • Alaska
  • California
  • Colorado
  • Connecticut
  • District of Columbia
  • Georgia
  • Hawaii (apostrophe before the last i or no? I never know.)
  • Indiana
  • Lousiana
  • Maine
  • Maryland
  • Massachusetts
  • Michigan
  • Montana
  • Nebraska
  • Nevada
  • New Jersey
  • New Mexico
  • Oklahoma
  • Oregon
  • Pennsylvania
  • Utah
  • Vermont
  • Washington
  • West Virginia
  • Wisconsin

Yikes. In most of these states, the “customarily engaged in” language is in the statutes covering who is an employee for unemployment insurance, but some of the states also include this as part of their test for other laws.

In California and Massachusetts, for example, that language is part C of the dreaded ABC Test that addresses other aspects of the employer-employee relationship.

To be safe, companies should consider requiring independent contractors to provide some proof that they are “actually engaged in” an “independently established trade, occupation, profession or business.” The proof might consist of evidence that they advertise for other customers or that they have other clients. What’s considered sufficient in one state might not be good enough in another.

While coronavirus seems to be dominating the news cycle, let’s not lose sight of the fact that independent contractor relationships are still under attack. Companies should do what they can to be proactive. Now it a good time to evaluate your relationships with contractors to make sure they can withstand a challenge.

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© 2020 Todd Lebowitz, posted on WhoIsMyEmployee.com, Exploring Issues of Independent Contractor Misclassification and Joint Employment. All rights reserved.

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When 500 Isn’t Necessarily 500: How to Count Employees Under the Families First Law

As you know by now, the Emergency FMLA and Emergency Paid Sick Leave provisions in the Families First Coronavirus Relief Act apply only to employers with fewer than 500 employees. But lots of questions have arisen about how to count.

For those who need help counting, here’s a helpful resource:

But for those of you counting employees instead of bats, let’s try this instead.

Question #1:  Do temps count? 

Answer:  Are we talking about feelings here? Because if we are, then everyone counts. You’re a winner! And you’re a winner! And you’re a winner!

Ah, but do they count toward the 500-employee threshold under Families First? Well that depends on whether they are joint employees of your business and the staffing firm.

As of last year, the answer for staffing agency temps was most often yes. But in January 2020, the DOL changed the test for how to determine whether someone is a joint employee under the Fair Labor Standards Act (FLSA). While there are different tests for determining joint employment, the one that matters for the Families First law is the FLSA test.

You can read more about the new DOL test here.

Question #2: Do part-timers count?

Answer: Yes. Count all part-time and full-time employees. Part-timers are people too. See, Feelings, Morris Albert (1975). Skip to 0:45 if you want to skip the instrumental intro.

Fun fact: In the late 80s, when you were arguing with your friends over which is the best Duran Duran song (answer: none), French songwriter Loulou Gaste successfully sued Albert for plagiarism, persuading a jury that Albert based the song on Gaste’s 1957 chart-topper “Pour Toi.”

Question #3: Do you aggregate employees across multiple subsidiaries?

Answer: Generally no. The default is that each subsidiary is its own employer. Divisions of a single subsidiary are aggregated.

But there are some situations when subsidiaries are aggregated. A conglomerate consisting of several different subsidiaries can a “single integrated employer,” in which case, you add the numbers together. We determine “single integrated employer” status by looking at four main factors:

  • Common management;
  • Common ownership;
  • Centralized control over labor relations and personnel; and
  • Interrelation of operations.

The more there exists common control, there more likely there is a single employer. There are many subfactors that also go into the analysis, and the most important factor tends to be centralized control over labor relations and personnel.

This is a difficult analysis, and there can be consequences to being a single integrated employer that go beyond Families First. If you think this applies to your company, proceed cautiously and seek legal advice.

Question#4: If I’m stuck home because of coronavirus, where can I find more helpful videos featuring The Count?

Answer: Ummm … this is where I sign off.

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© 2020 Todd Lebowitz, posted on WhoIsMyEmployee.com, Exploring Issues of Independent Contractor Misclassification and Joint Employment. All rights reserved.

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How Does the Families First Act Apply to Independent Contractors?

Families First Act Independent Contractors

Hungry for more COVID-19 info? I can help with that, but if your hunger pangs are for something more exotic — say, deep-fried bull testicles — I’m sorry to say you’re out of luck. Deerfield (Mich.) American Legion Post 392 has cancelled its 19th annual Testicle Festival, leaving festival supplier Dennis Gerth with 330 pounds of bull testicles in his freezer. That’s my 2020 submission if anyone is giving out awards for Sentences I Never Thought I’d Write.

Yes, the coronavirus is affecting society in ways we never imagined. Last week, Congress offered some relief to workers affected by the virus. While the new law doesn’t help Gerth or his ball-filled freezer, it does provide paid leave for employees of most small businesses.

But what about independent contractors?

The Families First Coronavirus Relief Act provides up to 12 weeks of partially paid time off for employees unable to work (or telework) for childcare reasons and up to 80 hours of paid sick time to employees unable to work (or telework) for six specified reasons.

Trying to apply the Act raises a lot of questions. Many are addressed here, in a conversational tone that acknowledges this is awfully confusing. But this post will focus on how the Act applies to independent contractors.

Do Independent Contractors Get the Benefits of the Act?

No. The Act provides paid sick leave and expanded Family and Medical Leave Act (FMLA) leave only to employees, and only if their employer has fewer than 500 employees.

How Does the Act Differentiate Between an Employee and an Independent Contractor?

Ah yes, the age old question of Who Is My Employee? The Act uses the definitions of “employee” in the FMLA and the Fair Labor Standards Act (FLSA). The FMLA uses the FLSA definition, so let’s focus on that.

The test for whether an independent contractor is really an employee under the FLSA is determined by using an economic realities test. This is a different test than the ones used for determining whether someone is an employee under tax, unemployment, workers compensation, and many other federal and state laws.

The economic realities test generally looks at these factors:

  1. The extent to which the services rendered are an integral part of the principal’s business.
  2. The permanency of the relationship.
  3. The amount of the alleged contractor’s investment in facilities and equipment.
  4. The nature and degree of control by the principal.
  5. The alleged contractor’s opportunities for profit and loss.
  6. The amount of initiative, judgment, or foresight in open market competition with others required for the success of the claimed independent contractor.
  7. The degree of independent business organization and operation.

This list is from DOL Fact Sheet #13, but it’s worth noting that different courts define the factors differently. Know your jurisdiction. Another commonly used listing of the factors can be found here.

The more independent the worker is from the business retaining his/her services, the more likely the worker is properly classified as an independent contractor.

How Could this Issue Arise?

With the economy in a cornoravirus-induced tailspin, lots of employees are losing their jobs, and lots of independent contractors are losing their engagements. When the income stream stops flowing, people look for a way to reopen the faucet.

Independent contractors might file unemployment claims. We’ve discuss the dangers of that here. They might also be tempted to file lawsuits claiming they’ve been misclassified. A successful claim could mean they’re entitled not only to the benefits of the Families First Act, but also potentially to unpaid overtime and other benefits that employees can receive.

Times are tough, and livelihoods are at stake. As contractors lose more work, we’re likely to see an increase in independent contractor misclassification claims. And that’s no bull.

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© 2020 Todd Lebowitz, posted on WhoIsMyEmployee.com, Exploring Issues of Independent Contractor Misclassification and Joint Employment. All rights reserved.

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Gator in Your Basement? Nope, That’s Just the NLRB Sharpening Its Joint Employer Test

NBLRB joint employer new regulation 2020

“Be careful as you go down the stairs, officer. An alligator lives in my basement.”

Police in Madison Township, Ohio, last week found a 5-foot gator penned in the basement of a family home. The family said that “Alli” was a pet they’ve raised for 25 years, since purchasing him as an adorable little tot at a reptile shop. (My, how they grow.)

The family accepted responsibility and avoided legal liability because they allowed to police to remove the animal.

A larger battle over responsibility and legal liability was also decided last week, but this battle was over the meaning of “joint employment” under the National Labor Relations Act (NLRA).

Here’s a quick Q&A to get you up to speed on the new regulation.

What happened?

On February 26, 2020, the National Labor Relations Board (NLRB) published a new regulation that changes the rules for determining whether a business is a joint employer under the NLRA.

What do you mean by joint employer?

When one business hires another business to provide services, the business providing the services is the primary employer. We see this often in staffing agency arrangements. The staffing agency is the primary employer. The primary employer is responsible for treating its workers as W-2 employees and doing all the things an employer is supposed to do.

If the business receiving the services exercises sufficient control over the workers, it can be deemed a “joint employer” of those workers. The workers would have two employers simultaneously.

Why should I care if I am a joint employer under the NLRA?

Being a joint employer creates rights and obligations under the NLRA on issues such as collective bargaining, strike activity, and unfair labor practice liability:

  • If the employees are represented by a union, the joint employer must participate in collective bargaining over their terms and conditions of employment.
  • Picketing directed at a joint employer that would otherwise be secondary and unlawful is primary and lawful.
  • Each business comprising the joint employer may be found jointly and severally liable for the other’s unfair labor practices.

Does the new rule make it harder or easier to be deemed a joint employer?

Much harder. The new rule significantly narrows the circumstances when a business can be deemed a joint employer.

What’s the new test?

Under the new regulation, a business can only be a joint employer of another employer’s employees only if it exercises “substantial direct and immediate control” over the “essential terms and conditions” of the workers’ employment.

What are essential terms and conditions?

Wages, benefits, hours of work, hiring, discharge, discipline, supervision, and direction.

Can you give me an example of how that works?

No.

Please?

Ok. I was just messing with you.

Let’s look at wages. You retain a staffing agency. You negotiate a cost-plus arrangement. You negotiate the rate you’ll pay the staffing agency per worker per hour, but the staffing agency determines the rate of pay each worker will receive. That’s not substantial and direct control because the staffing agency sets the wages of the worker.

Let’s consider discharge. You want to remove a staffing agency worker from the project. You instruct the agency to remove the worker. That’s not substantial control over whether the worker is discharged from employment. It’s up to the agency what to do with the worker next — reassign the worker, discharge the worker, tar and feather, etc.

How does this affect background checks and other terms in my contract with the primary employer?

Commonplace and routine clauses, like requiring the agency to perform background checks, are not evidence of joint employment.

In a dispute over whether there’s joint employment, who has the burden of proof?

The party asserting that an entity is a joint employer has the burden of proof.

Is the NLRB’s new joint employer regulation the same as the DOL’s new joint employer regulation?

Of course not. That would make this way too easy, and you wouldn’t need your lawyers as much.

In January 2020, the Department of Labor published a new regulation that sets up a new test for determining whether an entity is a joint employer under the Fair Labor Standards Act (FLSA). There are similarities in the tests. Both tests require the actual exercise of control for there to be joint employment. Previously, the mere right to exercise control was enough. But the tests are different.

You can read more about the DOL test here.

So now there are two tests for joint employment — one under the FLSA and one under the NLRA?

Ah, so naive. Who’s coming up with these questions, anyway?

Nope, there are lots of tests for determining who is a joint employer; and the tests differ based on which law we’re looking at — and based on who’s looking at it.

The DOL announced its new regulation for determining joint employer status under the FLSA, but unless you’re in a DOL audit, that doesn’t mean much. No court has adopted the new regulation yet, and we don’t know whether courts will defer to the regulation or disregard it. There will be litigation over whether the DOL has the right to redefine “joint employer” and limit the scope of a statute (the FLSA) passed by Congress.

The states have their own tests for determining joint employer status under state employment laws. Some states might defer to the regulations, but many states won’t.

But the NLRB regulation is here to stay, right?

Maybe, maybe not. In late 2018, the D.C. Circuit Court of Appeals ruled that the NLRB has no right to redefine “joint employment,” since the question of whether someone is an employee under the NLRA is governed by the common law test of agency — essentially, a right to control test.

But the NLRB chose to disregard that decision and issued its new regulation anyway.

But how can the NLRB enforce a new regulation defining “joint employer” when a federal court has said it can’t do that?

Because the NLRB will just do it anyway. There are 12 federal circuit courts of appeal, and they often disagree. The NLRB has a longstanding practice of ignoring rulings by the federal courts of appeal, except as to the specific case and the specific parties before that specific court. The NLRB takes the position that it must follow rulings by the Supreme Court, not the federal circuit courts of appeal.

So what’s the real status of the new NLRB regulation?

The NLRB will apply this new regulation in all of its proceedings. The new regulation takes effect April 26, 2020, which is 60 days after its publication in the Federal Register.

If NLRB rulings are appealed to a court, it remains to be seen whether some courts will apply the new regulation. The D.C. Circuit Court of Appeals probably will not.

Is the new regulation permanent?

It’s intended to be. There are at least three ways it could be undone.

  • Future NLRB members with a more pro-worker orientation could enact a new regulation that changes the definition.
  • Congress could pass a statute that redefines joint employer status. The statute would override the regulation.
  • The Supreme Court could rule that the NLRB has no authority to create a joint employer test.

Until one of those three things happens, the new test will stick around for a while, like a pet alligator. The Board will apply the new test to NLRA issues.

What happened to the alligator?

It has been relocated to an animal sanctuary in Myrtle Beach, South Carolina. Despite its new residence, the gator was deemed ineligible to vote in last Saturday’s primaries.

© 2020 Todd Lebowitz, posted on WhoIsMyEmployee.com, Exploring Issues of Independent Contractor Misclassification and Joint Employment. All rights reserved.

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Lost Chicken, Very Friendly: 2020 IRS Tips on Independent Contractor Status Are Now Available

Years ago, I signed up for the Next Door app, thinking it might be helpful to hear about things going on in my neighborhood. Most of the posts I see are useless — Can anyone recommend a good restaurant? Is it gonna snow tonight? Does Solon have any good proctologists?

I was ready to unsubscribe but just hadn’t gotten around to it. But then, last week, I got the post that made it all worthwhile:

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I should have clicked “Thank,” because I really do want to thank D. from South Central Solon for that post. The best part, of course, is the armchair psychoanalysis of Lost Chicken’s personality: “Very friendly.” (Lost Chicken also scores high for empathy and teamwork.)

Also known for being “Very friendly” is the IRS. New for 2020 is the Employer’s Supplemental Tax Guide, also known by its catchier, more taxlike moniker, Publication 15-A. Please don’t take my copy. You can get your own here.

Publication 15-A includes a section on independent contractor misclassification. It reminds employers that the IRS uses a Right to Control Test, which evaluates factors related to behavioral control, financial control, and the type of relationship of the parties. The specific factors are listed.

To improve readership, the IRS offers several helpful hypotheticals to illustrate the Independent Contractor vs. Employee conundrum, using memorable characters such as Vera Elm, an electrician; and Helen Bach, an auto mechanic. (But I see Helen Bach as more of a resurrected doomsday cult leader. I’m going to assume that the person who wrote this hypothetical pulled one over on the supervisor who approved it. Well played, IRS writer. Well played.)

Publication 15-A provides other helpful tips for employers at tax time. Get yours now, while supplies last. I’m going to offer a few extra copies on the Next Door app.

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© 2020 Todd Lebowitz, posted on WhoIsMyEmployee.com, Exploring Issues of Independent Contractor Misclassification and Joint Employment. All rights reserved.

Need training on avoiding independent contractor misclassification claims? Hey, I do that!  

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