Friday, February 19, 2021

Biden Administration Halts Trump-Era Independent Contractor Rule

Author: Caitlin Gehlen

As we predicted in a blog post earlier this year, the Biden administration has placed a 60-day hold on the U.S. Department of Labor’s (“DOL”) final rule on determining when a worker is an employee or independent contractor under the Fair Labor Standards Act (“FLSA”) which was expected to take effect March 8, 2021. The Biden Administration issued a memorandum to various executive agencies, including the DOL, asking that they: (1) not propose or issue any rules until a department or agency head appointed or designated by the Biden Administration reviews and approves the rule; (2) withdraw any rules previously sent to the Office of the Federal Register for publication that have not yet been published; and (3) consider postponing the effective date of any published rules that have not yet taken effect by sixty days.

This development effectively means that employers are still subject to the FLSA contractor test used prior to the DOL’s Trump-era final rule. Under that test, multiple factors need to be assessed when considering whether a worker qualifies as an independent contractor, including:
  1. The extent to which the services rendered by the worker are an integral part of the employer's business.
  2. The permanency of the relationship.
  3. The amount of the worker’s investment in facilities and equipment.
  4. The nature and degree of control by the employer.
  5. The worker’s opportunities for profit and loss.
  6. The amount of initiative, judgment, or foresight in open market competition with others required for the success of the worker.
  7. The degree of independent business organization and operation.
We can, however, theorize how the Biden Administration will move forward on the independent contractor issue. While not certain, we predict that the Biden Administration will ask the DOL to revisit the Trump-era final rule and shift course. President Biden has previously expressed support for a nationwide “ABC” test, which employers in some states such as California, Illinois and New Jersey already use. The “ABC” Test, if adopted by the DOL, would make it much harder to classify workers as independent contractors under the FLSA. For example, under California's version of the more-stringent test, all three of the following factors must be met for a worker to be considered an independent contractor:
  1. The worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact.
  2. The worker performs tasks that are outside the usual course of the hiring entity's business.
  3. The worker is customarily engaged in an independently established trade, occupation or business of the same nature as the work performed for the hiring entity.
Moving towards a nationwide “ABC” Test would be a significant shift for numerous employers and would likely require a review of existing independent contractor arrangements to ensure compliance. Alternatively, the DOL might leave in place the current pre-Trump administration rule or adopt some other approach.

We will continue to monitor any legislative or executive changes on the classification front and update accordingly.

Friday, February 12, 2021

Vaccination Incentive Guidance Requested

Author: Rosalee McNamara

On Wednesday, February 10, the CDC announced that individuals who are fully vaccinated against SARS-CoV-2 do not necessarily have to quarantine following exposure to someone with suspected or confirmed COVID-19.

In addition, businesses have asked the U.S. Equal Opportunity Commission (EEOC) to clarify the types of incentives employers can legally provide employees to encourage them to get COVID-19 vaccinations. Incentives offered by some employers might, for example, include: 
  • Time off from work to get vaccinated, often with pay
  • Incentive bonus (for example, $100)
  • Gift cards
  • Time off after the 2nd vaccination

Thursday, February 4, 2021

OSHA Issues New Guidance on Mitigating and Preventing the Spread of COVID-19 in the Workplace

Author: Emily Mawer

Last week, the federal Occupational Safety and Health Administration (OSHA) issued new guidance to help employers and employees identify risks of being exposed to and/or contracting COVID-19 in the workplace and to assist in determining appropriate control measures. The guidance is advisory in nature and does not impose new legal requirements on employers, but provides additional information that may be helpful to employers in their efforts to provide a safe and healthful workplace during the COVID-19 pandemic.

Thursday, January 28, 2021

Protecting an Employer’s Most Valuable Assets: Employers Should Remember to Revisit Non-Compete Agreements & Confidentiality Agreements

Author: Dean LeDoux

The beginning of a new year is a good time for employers to consider reviewing and possibly revising any non-compete and confidentiality agreements in place for their workforce or to consider putting such agreements in place. Generally, courts look more favorably upon the enforcement of confidentiality agreements than on non-compete or non-solicitation restrictions and all are subject to state law, as discussed more below. It is also possible that the federal law landscape on non-compete agreements might change significantly under the new administration of President Biden. Statements made by the Biden campaign prior to the election included a focus on limiting the use of non-compete restrictions.

Friday, January 22, 2021

New Year, New Administration Bringing Changes to Legal Landscape for Employers

Author: Mark Mathison

It comes as little surprise that the new administration in Washington is contemplating changes to laws and rules affecting employers. Early hints about changes that might be in store began to appear already on Inauguration Day. These included a regulatory freeze issued by the White House in the form of a non-binding memorandum to federal agencies. This freeze, which is aimed at halting pending regulatory changes while the new administration takes time to assess them, may affect the Final Rule on Independent Contractor status about which we wrote in this space on January 14, 2021. We noted in that post:
It is anticipated that the Biden administration will takes steps to withdraw or change the Final Rule. The new administration may be able to delay the effective date of the rule by up to 60 days. During any postponement, the Biden administration could seek to propose a new rule or repeal the Trump administration Final Rule through the administrative rule-making process.

Thursday, January 14, 2021

U.S. Department of Labor Issues Final Rule on Independent Contractor Status

Author: Dorrie Larison

On January 7, 2021, the U.S. Department of Labor (DOL) published its final rule (“Final Rule”) setting new standards for determining when a worker is an employee or an independent contractor under the Fair Labor Standards Act (FLSA). The Final Rule takes effect sixty days from its publication in the Federal Register and is, therefore, scheduled to take effect on March 8, 2021. The DOL notes that the Final Rule reaffirms the “economic reality” test; however, the new test changes the analysis to be used when applying the test.

Wednesday, December 23, 2020

COVID-19 Vaccinations and the Workplace: What You Need to Know Right Now

Author: Dion Farganis

With two COVID-19 vaccines already authorized for emergency use in the United States and more likely forthcoming soon, employers are asking whether they can — and should — require employees to get vaccinated. This alert identifies some of the major issues that employers are likely to face when rolling out policies related to vaccinations. 

Can Employers Require Employees to Get Vaccinated?

Recently released guidance from the federal Equal Employment Opportunity Commission (EEOC) strongly suggests that employers can require employees to get vaccinated. Although the guidance does not explicitly state that employer-mandated vaccinations are lawful, it addresses a range of issues confronting employers who have adopted a vaccination requirement policy. This suggests that the EEOC presumes mandatory vaccination policies can be lawful if administered properly.