Independent contractor or employee? DOL revamps its misclassification webpage

Over the past seven years, DOL’s Wage and Hour Division (WHD) has been engaged in a crusade against the misclassification of workers as contractors rather than employees. Under Administrator David Weil, WHD has coined the term “fissured workplace” to illustrate business models where workers are not employed directly by the firm at which they work. Under this model, “contingent workers” may be classified as independent contractors, temps, or employees of subcontractors or management firms.

As part of its efforts to educate the public and crack down on fissured workplace labor law violations, the WHD reissued its on-line guidance on independent contractor misclassification and added resources from other federal and state agencies on December 19. WHD describes the new webpage as a “user-friendly webpage where workers, employers, and government agencies can find information and resources” about misclassification of workers as independent contractors.

The new webpage compiles large amounts of data, but contains almost nothing new for those familiar with the DOL’s misclassification information. Much of the material is a rehash of DOL’s previous webpage on the subject. Some of the resources on the new page appear to have little or no connection to misclassification issues. However, the new page is useful in that it combines information from various agencies (OSHA, MSHA, IRS, States), and is a sort of one-stop shopping webpage for materials from several government agencies with interests in independent contractors. That appears to be what’s ‘new’.

The new webpage lists links to eight different types of resources:

·         Pay and Misclassification

·         Health and Safety Concerns on the Job

·         Unemployment Insurance and Misclassification

·         Anti-Retaliation/Anti-Discrimination Rights for Workers

·         Federal Taxes and Misclassification

·         Health Care and Retirement Benefits

·         Resources for State and Federal Governments

·         Other Resources/Information

Selecting one of the above links connects the user to outlines, charts, legal information, and other guidance explaining the rights of those affected by misclassification. Here are some examples of the links under the Pay and Misclassification link:

·         Myths About Misclassification

·         Know Your Rights Video: Employee v. Independent Contractor

·         Am I an Employee? Employment Relationships Under the Fair Labor

          Standards Act

·         Wage-Hour Division Administrator’s Interpretation,

          The Application of the Fair Labor Standards Act’s “Suffer or Permit”

          Standard in the Identification of Employees who are Misclassified as

          Independent Contractors

A review of the webpage makes it clear that the DOL hopes to alert workers to possible misclassification. In turn, this could lead to an increased number of complaints and enforcement actions at the state and federal level, as well as more collective or class actions alleging misclassification. But the DOL’s new web page also is a helpful guide for employers who utilize independent contractors and other types of contingent workers, such as temps. 

Make no mistake: the issue of worker misclassification is on the radar of numerous State and Federal Agencies. Staying up to speed on the rules is critical to avoid liabilities such as back pay, back taxes and fines that can result from violations.

The material in this blog is not intended, nor should it be construed or relied upon, as legal advice. Please consult with an attorney if specific legal information is needed.

- Mike Staebell