Independent Contractors in California—Misclassification Is Now “Easy as ABC”

Caroline Powell Donelan

California employers are facing a harsh new reality as a result of the state Supreme Court’s recent decision adopting a new test for determining whether a worker can properly be classified as an independent contractor (versus an employee) “for purposes of California wage orders,” which generally impose obligations on employers relating to non-exempt employees’ wages, hours, and working conditions like meal periods and rest breaks.

The underlying claims were brought by two delivery drivers alleging Dynamex, a nationwide same-day courier and delivery service, had improperly classified them and other “similarly situated” drivers as independent contractors. In relevant part, these drivers:

  • were paid a flat fee or percentage of the delivery fee received from the customer;
  • were generally free to set their own schedules;
  • were free to reject or accept jobs assigned by Dynamex;
  • used their own cell phones and vehicles for work;
  • were free to choose their own routes;
  • could perform work for other companies; and
  • were hired for an indefinite period of time.

Under most tests distinguishing independent contractors from employees, these facts would have weighed toward an independent contractor determination. However, in a densely-academic, 82-page opinion, the Court held that the “suffer or permit to work” definition of “employ” contained in the wage orders should replace the more flexible “right of control” test which has been used in California since 1989. Specifically, the Court adopted the “ABC” test as the proper way to distinguish employees from independent contractors. Continue reading “Independent Contractors in California—Misclassification Is Now “Easy as ABC””

Blank Rome Alert—Gig Economy More Employer-Friendly? Ask Uber!

Jason E. Reisman

Spoiler alert! Yesterday, the U.S. District Court for the Eastern District of Pennsylvania handed Uber what the Court described as Uber’s first win on its independent contractor classification for one class of its drivers: “This case is the first to grant summary judgment on the question of whether drivers for UberBLACK are employees or independent contractors within the meaning of the Fair Labor Standards Act ….” The case is Razak et al. v. Uber Technologies, Inc. et al. (Civil Action No. 16-573; 4/11/18).

Wow. Pretty significant progress for the gig economy’s foundational feature—the engagement of workers classified as “independent contractors.” I dare say that, with this decision, the gig economy may have just gotten a little more employer-friendly—at least here in Eastern Pennsylvania and at least as to Uber. Continue reading “Blank Rome Alert—Gig Economy More Employer-Friendly? Ask Uber!”

DOL Gets “Cute” with New Compliance Guidance … Animated Videos

Jason E. Reisman

The U.S. Department of Labor (“DOL”) has been trumpeting its “new” focus—with the incoming Trump administration—on “educating” employers to improve compliance. The latest effort by the DOL involves newly created, short animated videos—you can watch all five of them here.

The DOL announced these videos with this selling point: “Tired of poring through regulations and dense text trying to determine your legal responsibilities under federal labor law as an employer? We have a solution.” Well, we’re not sure that’s exactly accurate since they do not provide a comprehensive explanation of the legal responsibilities of covered employers. Continue reading “DOL Gets “Cute” with New Compliance Guidance … Animated Videos”

New York #MeToo Initiatives—It’s No Longer Just an HR Issue

Stephen E. Tisman and Rither Alabre

Propelled by the Harvey Weinstein scandal and the “#MeToo” movement, New York government officials have taken new steps to protect victims of sexual misconduct in the workplace.

  • The New York County District Attorney’s Office has created a special “Work-Related Sexual Violence Team” of prosecutors to investigate reports of work-related sexual violence.
  • The New York Attorney General filed suit, in response to the announcement of the proposed sale of the Weinstein Company, for civil penalties and an order of “restitution” to victims.

These actions make clear that new layers of scrutiny are being imposed to examine how employers handle sexual harassment claims. Importantly, companies and individuals faced with such claims will confront new areas of exposure—outside of traditional human resources procedures and concerns—which must be analyzed and addressed. Continue reading “New York #MeToo Initiatives—It’s No Longer Just an HR Issue”

DOL Bends Slightly More toward Employers—Self-Audits (Via Pilot Program) Are Back!

Jason E. Reisman

No one questions the incredibly complex and nuanced web of wage and hour regulations that the U.S. Department of Labor (“DOL”) has laid down over the last 80 or so years as guidance under the Fair Labor Standards Act (“FLSA”). Of course, in one sense, the regulations represent a grand effort to try to address just about every possible scenario implicating minimum wage and overtime pay concerns. On the other hand, the sheer volume of the regulations and embedded intricacies often leave employers scratching their heads. Well, compliance help may be on the way! In another (expected) move under Republican administration stewardship, which typically focuses on compliance assistance rather than “gotcha” enforcement, there will soon be an option for any employer that realizes it has been mistakenly out of compliance to self-report and obtain a final resolution.

The DOL’s Wage and Hour Division (“WHD”) has just announced that it will implement a new nationwide pilot program, the Payroll Audit Independent Determination (“PAID”) program, which it says is designed to “facilitate[] resolution of potential overtime and minimum wage violations under the [FLSA].” Continue reading “DOL Bends Slightly More toward Employers—Self-Audits (Via Pilot Program) Are Back!”

Just When You Thought It Was Safe to Go Back in the Water: PA Takes Charge—Raising White Collar Exemption Salary Threshold

Jason E. Reisman

Proclaiming it an effort to strengthen the middle class in Pennsylvania, Governor Tom Wolf announced this week a proposal to modernize the Commonwealth’s outdated overtime rules to increase pay for nearly a half million workers—he’s instructed the Department of Labor & Industry (“DOLI”) to update the white collar exemption overtime regulations and more than double the salary threshold necessary to be exempt from overtime. Sound familiar? Continue reading “Just When You Thought It Was Safe to Go Back in the Water: PA Takes Charge—Raising White Collar Exemption Salary Threshold”

Just in Time for the Holidays

Anthony A. Mingione

New York State is considering new regulations that will restrict the ability of service industry employers to utilize “on-call” or “just in time” scheduling practices for shift workers. These scheduling practices are common in many industries and generally allow employers to schedule, cancel, or cut workers’ shifts with little or no advance notice.

Employees testifying before the State Department of Labor said that these practices often leave workers unable to manage child care schedules and personal engagements, and prevent them from taking second jobs. Business representatives argued they require flexibility and that employers need to have these scheduling practices available to adapt to unpredictable circumstances, such as employees not attending work, unexpected customer demands, or inclement weather. Continue reading “Just in Time for the Holidays”