On July 13, 2018, the acting administrator for the United States Department of Labor’s Wage and Hour Division (WHD) issued Field Assistance Bulletin (FAB) 2018-4 to assist field staff in determining when home care, nurse, or caregiver registries will be considered employers under the Fair Labor Standards Act. The FAB reviews a number of practices and business models utilized by registries to point out which might suggest an employment relationship and which would not. When a caregiver registry acts as a matching service between caregivers and clients, no employment relationship will be found. However, if the registry determines pay, has the power to hire or fire, or controls the schedule of the caregiver, it will likely be found to be an employer. The FAB provides meaningful and helpful clarification regarding specific registry practices that might be of assistance to both the WHD and the regulated community.
Notably, the FAB is limited to a select, narrow group of employers—those that hold themselves out as home care, nurse, or caregiver registries. While employers in other industries may be able to utilize the FAB for guidance, it is limited on its face to the aforementioned registries. Additionally, while some may read this FAB as a change in policy, in reality, it is nothing more than a reiteration of the WHD’s “economic realities” rubric that has been at the center of misclassification issues for many years. The FAB emphasizes that the “totality of the circumstances” will continue to be critical to any analysis of employer status.
The FAB does provide a helpful list of activities that, if performed by a registry, typically do not suggest an employer-employee relationship. These practices include:
The FAB also delineates activities that, if carried out by the registry, likely will suggest an employer-employee relationship between the registry and the caregiver. These include:
The FAB gives registries guidance on how to structure their relationships with caregivers and clients to maintain an independent contractor relationship. If a registry stays within a matchmaking or referral service model, the WHD will likely conclude the relationship is not that of employer and employee. However, when the registry goes beyond simply matching caregivers with clients and starts hiring and firing caregivers and/or dealing with their compensation, duties, and schedules, the “economic reality” of the relationship will lead the WHD to conclude that an employer-employee relationship exists.
Maintaining an independent contractor relationship in the home healthcare world can be difficult, and an understanding of this FAB is only one aspect of avoiding a finding of an employer-employee relationship. Equally important is structuring policies and procedures that are consistent with the FAB. Employers may also want to maintain adequate documentation of the independent contractor relationship through, for example, a detailed, written contract outlining the contours of the relationship.