DOL Withdraws Independent Contractor Guidance

(Dept of Labor) Permanent link

On Wednesday, June 7, Department of Labor (DOL) Secretary Alexander Acosta announced the withdrawal of the independent contractor guidance first issued in July 2015. 

The July 2015 guidance offered an expanded application of the multi-factor “economic realities” test, specifically focusing on the individual worker’s economic dependence on the employer. 

1.    Is the work an integral part of the employer’s business?
2.    Does the worker’s managerial skill affect the worker’s opportunity for profit or loss?
3.    How does the worker’s relative investment compare to the employer’s investment?
4.    Does the work performed require special skill and initiative?
5.    Is the relationship between the worker and the employer permanent or indefinite?
6.    What is the nature and degree of the employer’s control?

The withdrawal does not negate an employer’s responsibilities under the Fair Labor Standards Act but instead demonstrates the Trump Administration’s commitment to rescinding onerous regulations and changing interpretation. It is yet to be seen but it may be the start in a shift in the Administration’s enforcement priorities including the joint misclassification initiative with 37 states and the Internal Revenue Service. 

For clubs who made changes to existing employee/independent contractor relationships since July 2015, it is best to review these agreements annually in concert with legal counsel to ensure they meet all applicable local, state and federal law. 

Posted by Will Flourance at 06/12/2017 01:20:24 PM |