Yesterday, officials at the Wage and Hour Division of the Department of Labor (DOL) released some new guidelines regarding how employers should classify employees versus independent contractors.
Detailing the DOL’s policy regarding worker classification, this 15-page “Administrator’s Interpretation” provides in-depth details “regarding the application of the standards for determining who is an employee under the Fair Labor Standards Act (FLSA)” to curtail misclassification.
The reason that these new guidelines have just been issued, according to the DOL, is that worker misclassification is a “problematic trend” and that:
Misclassification of employees as independent contractors is found in an increasing number of workplaces in the United States, in part reflecting larger restructuring of business organizations. When employers improperly classify employees as independent contractors, the employees may not receive important workplace protections such as the minimum wage, overtime compensation, unemployment insurance, and workers’ compensation. Misclassification also results in lower tax revenues for government and an uneven playing field for employers who properly classify their workers.
How to Determine Employee vs Contractor Status, According to New DOL Guidelines
The DOL’s guidelines explain that the “economic realities” test should be used in employers’ determinations regarding whether to classify workers as employees versus independent contractors. This test is aimed at evaluating whether a worker is in business for himself versus whether he is economically dependent on the employer.
The factors that employers should specifically look at when using this test include (but are not limited to):
- How integral the work performed by a worker is to the employer’s business
- Whether the work requires special business or managerial skills
- Whether the work relationship is permanent or temporary
- How much control the employer retains over the employee/relationship
- The relative investments of the worker and the employer.
These factors should be equally weighed, according to the DOL.
While employers have been called on to review the work statuses of their workers and ensure that all workers are properly classified, those who believe that they have been subject to misclassification by an employer should consult a lawyer ASAP to learn more about their rights and options.
Contact an Experienced Los Angeles Employment Lawyer at Urbanic & Associates
Have you been the target of worker misclassification, workplace discrimination or retaliation? If so, you can turn to Los Angeles employment lawyer at Urbanic & Associates for help defending your rights and pursuing justice. Since 2000, our lawyers have been dedicated, aggressive advocates for our clients, helping them stand up to even the most formidable opponents in any legal setting.
Take action now by contacting our firm to learn more about your options for justice. To speak directly to Attorney James Urbanic, call (310) 216-0900 or send our firm an email using the contact form on this page.
From our offices based in Los Angeles, Attorney James Urbanic provides superior representation to clients throughout Los Angeles County and southern California, including (but not limited to) those in Glendale, Burbank, Alhambra, Van Nuys, Santa Monica and Orange County.