DOL Replaces Guidance on Employee Classification

The U.S. Department of Labor (DOL) has withdrawn its 2014 guidance regarding the meaning and scope of the term “employment relationship” under the federal Fair Labor Standards Act (FLSA) and replaced it with its guidance from 2008. As a result of this move, the DOL no longer advises that “most workers are employees.”

Withdrawn 2014 Guidance
In 2014, the DOL issued guidance on how to determine whether an employment or independent contractor relationship exists for purposes of the federal FLSA. The guidance stated, among other things, “Applying the FLSA’s definition [of “employ”], workers who are economically dependent on the business of the employer, regardless of skill level, are considered to be employees, and most workers are employees.” Effective immediately, this guidance has been withdrawn.

2008 Guidance Once Again Effective
The 2014 guidance has been replaced by guidance from 2008. The 2008 guidance does not contain the guidance that “most workers are employees.” However, this guidance does include the same “economic realities” test present in the 2014 guidance, under which determination of employee status is made by considering the following factors:

  • Whether the work performed is an integral part of the employer’s business.
  • Whether the worker’s managerial skill affects the worker’s opportunities for profit or loss.
  • The worker’s relative investment compared to the employer’s investment.
  • Whether work performed requires special business skills, judgment, and initiative.
  • Whether the worker-employer relationship is permanent or indefinite.
  • The nature and degree of the employer’s control of the work.
Originally posted by HR360
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How do you know if your labor law posters are up to date? When you are one of our customers, you dont’ have to worry!

Our customers are always calling or emailing us because they are bombarded with solicitations for labor law posters.  Some get the one in the mail that talks about fines, see here  others get emails that look like this, copied directly from the email:

“The DOL has just made updates to the Fair Labor Standards Act (FLSA), also known as the Minimum Wage notice, and the Employee Polygraph Protection Act (EPPA).
By law, employers are required to post these new versions.
The changes made to the mandatory posters that you should be aware of are:

  • Removed fine amounts that became outdated when increased fines and civil penalties went into effect
  • The revised FLSA aka Minimum Wage poster has added information about independent contractors and nursing mothers
  • The FLSA poster now prominently displays the posting requirement. The phrase “The law requires employers to display this poster where employees can readily see it” has been moved to the top of the poster. Guarantee that you are compliant by law by displaying both revised posters along with their state required notices, many of which have recently been updated for 2017. Get both your federal and state labor law posters here”

This is a solicitation, when the person clicks on the links, it takes you to a website to order new posters.

The interesting thing about this email that’s going around is that its from July 2017, and the changes they are talking about took place in Aug 2016!!! They are about a year too late.

Our customers know when they buy from us, they are notified of any changes immediately upon their release, not a year later.