Through a partnership with Littler Mendelson P.C Labor & Employment Law Solutions, we are excited to share the “Ask the Experts” Article. Each week, we will feature a new question, from you our members, related to workplace issues and topics that will be answered from our experts and partners at Littler.
This week’s question comes from one of our Private Duty Home Care members and concerns the Department of Labor’s proposed independent contractor rule.
Question. Q. How will the DOL’s newly proposed independent contractor rule impact our business?
Answer by Will Vail
- Under the federal Fair Labor Standards Act (FLSA), employers must pay their employees in certain ways (think minimum wage, overtime, guaranteed salary, etc.). But independent contractors are not subject to the pay requirements of the FLSA. So the question sometimes arises whether someone performing work for someone else is an employee or independent contractor. The DOL announced a proposed rule recently meant to clarify the test for resolving this question. At this point, the DOL is soliciting comments on its proposed rule. Those comments are due October 26. The DOL will then consider those comments, make changes to the rule as it sees fit and then publish a final rule. It is unclear when a final rule might be published.
The proposed rule is most likely to impact registries and online marketplaces that connect caregivers and clients. The rule as it is currently drafted retains the “economic realities” test, but makes it a bit more user-friendly. At the heart of this test is whether a worker is in business for themselves (and thus an independent contractor) or is economically dependent on a putative employer for work (and thus an employee). The DOL explained there are two “core” factors that should be used to evaluate a given arrangement: (1) the nature and degree of the worker’s control over the work; and (2) the worker’s opportunity for profit or loss based on initiative and/or investment. If these factors point in different directions, then three “guidepost” factors may help resolve the issue: (A) the amount of skill required for the work; (B) the degree of permanence of the working relationship between the worker and the potential employer; and (C) whether the work is part of an integrated unit of production. The DOL also noted that actual practice is more relevant than what may be contractually or theoretically possible in determining whether a worker is an employee or an independent contractor. The DOL has explained if the core factors point in one direction, and the guidepost factors point unanimously in the opposite direction, the core factors control.
If made final, the regulations would supplant any prior contrary DOL guidance. This may cause you to wonder what that means for the Field Assistance Bulletin (FAB) issued in July 2018 regarding registries. We think that if the current version of the rule were adopted, there would be little change. The fundamental conclusions reached in the FAB should remain. We believe the new regulations would merely tweak the analytical framework used to reach those conclusions.
At Littler, we understand that workplace issues can’t wait. With access to more than 1,500 employment attorneys in over 80 offices around the world, our clients don’t have to. We aim to go beyond best practices, creating solutions that help clients navigate a complex business world. With deep experience and resources that are local, everywhere, we are fully focused on your business. With a diverse team of the brightest minds, we foster a culture that celebrates original thinking. And with powerful proprietary technology, we disrupt the status quo – delivering groundbreaking innovation that prepares employers not just for what’s happening today, but for what’s likely to happen tomorrow. For over 75 years, our firm has harnessed these strengths to offer fresh perspectives on each matter we advise, litigate, mediate, and negotiate. Because at Littler, we’re fueled by ingenuity and inspired by you.
About Will Vail, Special Council
William Vail brings a wealth of private practice and in-house experience to every matter he handles. For nearly seven years, he was lead employment counsel two separate divisions of largest post-acute health care provider in the nation (the home health, hospice and community care division and nursing center division). He later was lead employment and litigation counsel for the largest home health and hospice provider in the nation following a corporate reorganization. In addition to a wide variety of employment issues, Will is familiar with False Claims Act, professional liability and general liability matters related to healthcare operations.
Will is a core member of Littler’s healthcare practice group. He has experience litigating across the United States, providing advice and counsel to both legal and non-legal stakeholders, performing due diligence related to mergers and acquisitions, helping start-ups begin operations in a compliant method, winding down operations, conducting management training, and assisting in the integration of new entities into going concerns.
William Vail began his legal career in 2004 as a law clerk to a federal judge sitting in the Western District of Virginia. He then transitioned to private practice in Louisville, Kentucky, for a regional full-service firm and later a national labor and employment boutique firm. At Littler, Will is based in Louisville as well as Atlanta.
*Not licensed to practice law in Georgia