There is a comedian by the name of Jeff Foxworthy who has been enormously popular for the past two decades or so.
Perhaps you are familiar with him. (And if you are, you probably thought that you stumbled upon the wrong blog just now.)
Remarkably, Mr. Foxworthy’s name comes up frequently when talking about whether workers have been properly classified as independent contractors. Not because there is anything funny about that issue; there isn’t. And not because Mr. Foxworthy was misclassified as an independent contractor. Instead, his name pops up because Mr. Foxworthy has ...
On October 25, 2022, the Department of Labor extended the comment period for its new proposed rule regarding independent contractor status under the Fair Labor Standards Act. While the comment period was originally set to expire on November 28, 2022, interested parties will now have until December 13, 2022 to submit comments.
In light of the federal court ruling reinstating the Trump-era independent contractor regulation (discussed here), on October 13, 2022, the Department of Labor published a Notice of Proposed Rulemaking regarding independent contractor status under the Fair Labor Standards Act.
Over the past few years, lower courts in Massachusetts have grappled with determining whether the “ABC test” under the independent-contractor statute provides the proper framework for assessing joint-employment liability. The Supreme Judicial Court (SJC) has finally answered that question. On December 13, 2021, in Jinks v. Credico (USA) LLC, the SJC held that the independent-contractor statute’s “ABC test” does not apply and instead adopted the Fair Labor Standards Act’s (FLSA) “totality of the circumstances” approach to joint employment.
Credico was a client broker for independent direct marketing companies. It contracted with DFW Consultants, Inc. (DFW) to provide sales and marketing services for its clients in Massachusetts. To provide those services, DFW hired three of the plaintiffs – Kyana Jinks, Antwione Taylor, and Lee Tremblay – as salespeople. DFW classified Jinks and Taylor as independent contractors and Tremblay as an employee.
Misclassifying workers as independent contractors rather than employees is a costly mistake. Among the many issues arising from misclassification is potential liability under federal and state minimum wage and overtime laws. As the laws continue to change and develop, so do the risks to contracting entities.
On September 1, 2021, Massachusetts Attorney General Maura Healey approved two versions of a ballot initiative (version 1, version 2) concerning the relationship between app-based drivers (such as those who transport passengers or deliver food) and the companies with which they contract. If passed, the ballot initiative will enact the Relationship Between Network Companies and App-Based Drivers Act (the “Act”) and classify such drivers as independent contractors, not employees. It will also require ride-sharing and food-delivery companies to provide them with certain benefits.
As we previously discussed, in early January 2021, the U.S. Department of Labor issued a Final Rule regarding independent contractor status under the Fair Labor Standards Act. On May 5, 2021, in line with the policy goals of the new administration, the Department issued a Final Rule withdrawing the January Final Rule. The withdrawal went into effect on May 6, 2021, upon the publication in the Federal Register (86 FR 24303). The January independent contractor rule was originally to go into effect in March, before the Department issued a notice of proposed rulemaking proposing to ...
In November 2020, California voters approved Proposition 22, removing businesses that operate on-demand rideshare and food delivery platforms from the scope of AB 5, California’s controversial independent contractor law. But before voters approved Proposition 22, the Attorney General of California filed suit against two such businesses, seeking injunctive relief, restitution, and penalties.
As we wrote about here, in August 2020, a California Superior Court judge issued a preliminary injunction prohibiting those businesses from treating drivers who use their ...
As we have previously written here, the California Supreme Court’s 2018 decision in Dynamex Operations West, Inc. v. Superior Court dramatically changed the standard for determining whether workers in California were properly classified as independent contractors, creating a new “ABC” test that has subsequently been codified as AB 5. A significant question left open was whether Dynamex would apply retroactively.
In Vasquez v. Jan-Pro Franchising International, Inc., the California Supreme Court has concluded that Dynamex indeed applies retroactively ...
As we wrote about in more detail here, the ongoing coronavirus pandemic has brought increased attention to the legal and practical distinctions between employees (who are entitled to various compensation and employment benefits under the law) and independent contractors (who generally are not). The pandemic has also prompted lawmakers at the federal, state, and local level to explore further legislation designed to provide independent contractors with greater protections under the law.
The Seattle City Council has now passed two ordinances—the “Gig Worker Premium Pay ...
As we have written here, the day before California’s controversial AB 5 was set to go into effect, U.S. District Court Judge Roger Benitez issued a temporary restraining order to block enforcement of the law as to approximately 70,000 independent truckers.
Subsequently, Judge Benitez granted a preliminary injunction to prevent enforcement of the statute to those truckers.
In reaching his decision, Judge Benitez concluded that, as to independent truckers, the Federal Aviation Administration Authorization Act preempts AB 5.
The preliminary injunction is a significant ...
As we recently wrote here, just hours before California’s controversial AB 5 went into effect, a federal court in San Diego issued a temporary restraining order (“TRO”) to enjoin enforcement of the independent contractor statute as to approximately 70,000 independent truckers, many of whom have invested substantial sums of money to purchase their own trucks and to work as “owner-operators.”
Now, days after a state court judge ruled that the statute does not apply to independent truckers, the federal court has extended the TRO while it decides whether to enter a ...
Following the challenges to AB 5, California’s controversial new independent contractor law, can be a difficult endeavor. Every day seems to bring a new development.
We have written before about the hasty passage of the statute, about a ballot initiative to escape the scope of the law by ride-share and delivery companies, and challenges by independent truckers, freelance journalists and photographers, and ride-share and delivery companies.
While many were focused on whether a federal judge, who had already issued a temporary restraining order to enjoin enforcement of the new ...
As we wrote here recently, organizations representing freelance journalists and photographers filed suit seeking to enjoin enforcement of California’s controversial independent contractor statute, AB 5, as to them.
While they are not the only ones challenging the new law, their suit is not off to a promising start.
While a federal judge issued a temporary restraining order (“TRO”) to enjoin AB 5 as it applies to independent truckers, U.S. District Court Judge Philip Gutierrez in Los Angeles denied the freelance journalists and photographers’ request for a TRO on January ...
On January 1, 2020, California’s new independent contractor statute, known as AB 5, went into effect. The law codifies the use of an “ABC” test to determine if an individual may be classified as an independent contractor.
The hastily passed and controversial statute has been challenged by a number of groups as being unconstitutional and/or preempted by federal law, including ride-share and delivery companies and freelance writers.
Just hours before AB 5 went into effect, a California federal court in San Diego enjoined enforcement of the statute as to some individuals – ...
AB 5, California’s hastily passed and controversial independent contractor statute, which codifies the use of an “ABC test,” is set to go into effect on January 1, 2020.
Already, the California Trucking Association has filed suit challenging the statute.
As have freelance writers and photographers.
Now, it’s ride-share and delivery companies’ turn to file suit.
Those companies have already commenced the process to create a ballot initiative that would allow voters to decide whether to exempt ride-share and delivery drivers from the “ABC test.”
Now, on December ...
On April 29, 2019, the U.S. Department of Labor (“DOL”) issued an opinion letter concluding that workers providing services to customers referred to them through an unidentified virtual marketplace are properly classified as independent contractors under the Fair Labor Standards Act (“FLSA”).
Although the opinion letter is not “binding” authority, the DOL’s guidance should provide support to gig economy businesses defending against claims of independent contractor misclassification under the FLSA. The opinion letter may also be of value to businesses ...
On January 15, 2019, the U.S. Supreme Court issued a unanimous decision in New Prime Inc. v. Oliveira, a case concerning the enforceability of arbitration agreements.
Petitioner New Prime Inc. (“New Prime”) is an interstate trucking company that engaged Dominic Oliveira to perform work as a driver pursuant to an “Independent Contractor Operating Agreement,” containing both an arbitration clause and a delegation clause giving the arbitrator authority to decide threshold questions of arbitrability.
Oliveira filed a putative class action against New Prime in federal ...
In April 2018, we wrote about the California Supreme Court’s decision in Dynamex Operations West, Inc. v. Superior Court, which had clarified the standard for determining whether workers in California should be classified as employees or as independent contractors for purposes of the wage orders adopted by California’s Industrial Welfare Commission (“IWC”).
In Dynamex, the Court adopted the “ABC” test that has been used in some other jurisdictions. Because Dynamex had adopted the “ABC” test for claims arising under IWC wage orders, there was some uncertainty ...
In a move likely to impact employers in a variety of industries, U.S. Secretary of Labor Alexander Acosta announced on June 7, 2017 that the Department of Labor has withdrawn the Administrator’s Interpretations (“AIs”) on independent contractor status and joint employment, which had been issued in 2015 and 2016, respectively, during the tenure of former President Barack Obama.
The DOL advised that the withdrawal of the two AIs “does not change the legal responsibilities of employers under the Fair Labor Standards Act . . . , as reflected in the department’s long-standing ...
On January 14, 2015, in Hargrove v. Sleepy's LLC, the New Jersey Supreme Court answered a certified question from the Third Circuit and held that the “ABC” test governs whether a plaintiff is an employee or an independent contractor under the New Jersey Wage Payment Law and the New Jersey Wage and Hour Law.
Therefore, companies defending their independent contractor classifications in either litigation or government investigations under these statutes will be required to show that an individual providing services:
(A) is free from the company’s control in performing the ...
ESPN broadcaster Keith Olbermann recently held a mock press conference in which he pretended to be the new Commissioner of Baseball, and explained how he would improve the game in that role. For example, World Series games would start early enough for kids to watch them, the designated hitter would be eliminated, and Vin Scully would call all World Series games.
I’d like to do something similar. I am pleased to inform you that, for the rest of this blog entry, let’s assume that I am the new Secretary of Labor.
- An employer’s liability to ...
By Frederick Dawkins and Douglas Weiner
Earlier this month, at the ABA Labor and Employment Law Conference, Solicitor of Labor M. Patricia Smith reaffirmed that investigating independent contractors as misclassified remains a top priority of the U.S. Department of Labor’s (“DOL”) enforcement initiatives. The DOL will continue to work with other federal and state agencies, including the IRS, to share information and jointly investigate claims of worker misclassification. The joint enforcement effort is certainly driven by, among other things, an interest in ...
By Michael Kun
Last week, the U.S. Department of Labor’s Wage and Hour Division and the California Secretary of Labor announced that they were teaming up to crack down on employers who classify workers as independent contractors. http://www.dol.gov/opa/media/press/whd/WHD20120257.htm
The announcement that the two groups would work together on such an initiative should not come as much of a surprise to employers. Shortly after Hilda Solis took office as the U.S. Secretary of Labor, the Wage and Hour Division announced that it would be focusing on this issue. And California has ...
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