Department of Labor Withdraws Controversial Independent Contractor and Joint Employer Guidance

Department of Labor Withdraws Controversial Independent Contractor and Joint Employer Guidance

Jun 07, 2017

Client Alert

Brownstein Client Alert, June 7, 2017

Earlier today, the U.S. Department of Labor (“DOL”) withdrew two controversial Obama-era guidance letters relating to independent contractor classification and joint employment. The 2015 independent contractor guidance emphasized, among other things, the DOL’s position that “most workers are employees” under the Fair Labor Standards Act, and foreshadowed greater scrutiny with respect to the classification of workers. The 2016 joint employment guidance outlined the DOL’s expansive interpretation of the concept of “joint employment”—situations in which two or more employers would be deemed responsible for the same workers—with significant implications for franchised businesses, temporary and contract workers, and affiliated business entities, among others. In that 2016 guidance, the DOL explained that the joint employer doctrine does not require direct control over workers, but applies when one employer exercises “indirect control” over the workers of another employer.

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