ILMA Compoundings November 2016 - 27

LEGAL EASE

Independent Contractors:
The Crackdown Continues
Jeffrey L. Leiter

A

s the end of President Obama's presidency draws
closer, one area where his administration is working
to cement his legacy is labor and employment. One
example is the Department of Labor's (DOL) recent publication
of 12 Q&As on the issue of independent contractor (IC)
misclassification. "Misclassification Mythbusters" is intended
to educate workers about their status as ICs and to continue
to highlight DOL's crackdown on the misclassification of
employees as ICs. In August 2016, DOL announced a consent
judgment that required a business to pay $2,359,685 for IC
misclassification.
DOL's answers in the online publication nevertheless must be
scrutinized, because some of them are misleading. Let's start
with the suggestion in the "Mythbusters" publication that there
is a single-factor test for determining independent contractor
status under the Fair Labor Standards Act (FLSA). In Myth No. 3,
DOL states, "Under the FLSA, you are an employee if your work
indicates you are economically dependent on an employer.
On the other hand, you are an independent contractor if, as
a matter of economic reality, you are in business for yourself."
However, the "Mythbusters" publication does not square with a
July 2015 Administrator's Interpretation in which DOL said that it
would determine a worker's status under the FLSA by applying
a six-factor "economic realities" test approved by some courts.
These six factors are:
(1) Is the work an integral part of the employer's business?
(2) Does the worker's managerial skill affect the worker's
opportunity for profit and loss?
(3) How does the worker's relative investment compare to the
employer's investment?
(4) Does the work performed require special skill and initiative?
(5) Is the relationship between the worker and the employer
permanent or indefinite?
(6) What is the nature and degree of the employer's control?

Rather than run through each of the 12 myths in the DOL Q&A,
I want to use the online publication as a caution. Beyond the
"Mythbusters" publication conveying incorrect information
to workers, it reflects DOL's activity related to ICs, particularly
its focus of targeting of enforcement actions against those
businesses with ICs.
In addition to the Q&A publication, DOL recently signed
memoranda of understanding (MOU) with two more state
workforce agencies, bringing to 33 the number of states that
have entered into MOUs with DOL to share information and
conduct joint enforcement efforts on IC misclassification.

Compoundings November 2016 * 27 * Vol. 66 No. 11



ILMA Compoundings November 2016

Table of Contents for the Digital Edition of ILMA Compoundings November 2016

From the CEO: Takeaways from the ILMA 2016 Annual Meeting
Board Brief: Competing in the Current Economy
Voices & Views: Warning: Potential Design and Print Delays in 2017
Notes from ELGI: Make Sure ELGI Events Are on Your Calendar
Annual Meeting Highlights in Photos
The Argus Analysis: U.S. Base Oil Market Balanced Despite Weaker Demand
Family Business: In Praise of Peer Groups
Rules & Regs: Prop 65 Update: OEHHA Revises 'Clear and Reasonable' Warnings
Power Play: IRS Releases New Draft Affordable Care Act Instructions and Forms
Legal Ease: Independent Contractors: The Crackdown Continues
The White Paper: Promoting Safety During the Holidays
The Heart of ILMA: Member News
ILMA Attends Afton University
Lanxess Aquires Chemtura
Industry News: Ford Position on API CK-4 and FA-4
Advertising Index
ILMA Compoundings November 2016 - 1
ILMA Compoundings November 2016 - 2
ILMA Compoundings November 2016 - 3
ILMA Compoundings November 2016 - 4
ILMA Compoundings November 2016 - From the CEO: Takeaways from the ILMA 2016 Annual Meeting
ILMA Compoundings November 2016 - 6
ILMA Compoundings November 2016 - 7
ILMA Compoundings November 2016 - Board Brief: Competing in the Current Economy
ILMA Compoundings November 2016 - 9
ILMA Compoundings November 2016 - 10
ILMA Compoundings November 2016 - Voices & Views: Warning: Potential Design and Print Delays in 2017
ILMA Compoundings November 2016 - 12
ILMA Compoundings November 2016 - Notes from ELGI: Make Sure ELGI Events Are on Your Calendar
ILMA Compoundings November 2016 - Annual Meeting Highlights in Photos
ILMA Compoundings November 2016 - 15
ILMA Compoundings November 2016 - 16
ILMA Compoundings November 2016 - The Argus Analysis: U.S. Base Oil Market Balanced Despite Weaker Demand
ILMA Compoundings November 2016 - 18
ILMA Compoundings November 2016 - 19
ILMA Compoundings November 2016 - Family Business: In Praise of Peer Groups
ILMA Compoundings November 2016 - 21
ILMA Compoundings November 2016 - 22
ILMA Compoundings November 2016 - Rules & Regs: Prop 65 Update: OEHHA Revises 'Clear and Reasonable' Warnings
ILMA Compoundings November 2016 - 24
ILMA Compoundings November 2016 - Power Play: IRS Releases New Draft Affordable Care Act Instructions and Forms
ILMA Compoundings November 2016 - 26
ILMA Compoundings November 2016 - Legal Ease: Independent Contractors: The Crackdown Continues
ILMA Compoundings November 2016 - 28
ILMA Compoundings November 2016 - The White Paper: Promoting Safety During the Holidays
ILMA Compoundings November 2016 - 30
ILMA Compoundings November 2016 - ILMA Attends Afton University
ILMA Compoundings November 2016 - Lanxess Aquires Chemtura
ILMA Compoundings November 2016 - Industry News: Ford Position on API CK-4 and FA-4
ILMA Compoundings November 2016 - Advertising Index
ILMA Compoundings November 2016 - 35
ILMA Compoundings November 2016 - 36
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