Department of Labor Withdraws Informal Guidance on Joint Employment and Independent Contractors

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On June 7, 2017, U.S. Secretary of Labor Alexander Acosta announced the withdrawal of the U.S. Department of Labor’s 2015 and 2016 informal guidance on joint employment and independent contractors. Specifically withdrawn are:

  • The 2016 “administrator’s interpretation” on joint employment which provided guidance on joint employment under the Fair Labor Standards Act (FLSA) and included a distinction between “horizontal” joint employment and “vertical” joint employment.
  • The 2015 “administrator’s interpretation” on the classification of independent contractors which stated that “most workers are employees” under the FLSA. Although the administrator’s interpretation has been removed from the DOL website, the website released in 2016 called “What is ‘misclassification’?” has been retained and remains on the DOL website.

The announcement yesterday also stated that “[r]emoval of the administrator interpretations does not change the legal responsibilities of employers under the Fair Labor Standards Act and the Migrant and Seasonal Agricultural Worker Protection Act, as reflected in the department’s long-standing regulations and case law.”

It is possible that this announcement signals that the Trump administration may want to limit and prevent the definition of “employment” from being broadly expanded. It is likely that there will be more to come from the Trump administration in the distinct areas of independent contractors and joint employment. Businesses that utilize independent contractors or have relationships that could be considered joint employment should continue to monitor this ever-changing area of the law.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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