Coming this Summer, FLSA independent-contractor guidance from the DOL

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In March 2014, President Obama announced (here) that he would seek to revamp the Fair Labor Standards Act as it applies to overtime, “particularly for executive, administrative, and professional employees (often referred to as ‘white collar’ exemptions).” You can also read my post about the President’s announcement here.

And yet, here we are over a year later and the Department of Labor has yet to issue proposed regulations for public comment — let along the final updated regs.

I don’t want to say this taken a while, but, we now have a Triple Crown winner. At this rate, the Cubs will be World Series Champs before we see how much the $455 threshold changes for the salary-basis test.

Ok, I kid. I get it. This thing takes time. [cue music].

Broader FLSA guidance coming soon?

Maybe that’s because the DOL is doing more than just proposing revisions to the existing overtime regulations. Ben James of Law360 reports (here) that the DOL is poised to issue “an ‘administrator interpretation’ shortly that aims to clarify who qualifies as an independent contractor.”

It’s not as if the DOL has been silent on this issue. Here is a “Fair Labor Standards Act Advisor” on Independent Contractors. And here is an Independent Contractor Fact Sheet.

So, what can we expect to see and when?

Here’s the skinny from the Law360 article:

“I’ll be issuing an administrator interpretation specifically about our view of what is a legitimate independent contractor,” [WHD administrator Dr. David Weil] told those in attendance at a labor and employment law conference.

The upcoming administrator interpretation will go through “a very clear set of criteria,” Weil went on to say, adding that courts have said that evaluating an employment relationship “requires a careful consideration of the economic realities and multiple aspects of the relationship.” 

After his address, Weil declined to give a specific time frame for the issuance of the guidance but did say that the target was “early summer.”

So, for now, we wait. And wait. And wait.

What can employers do in the meantime?

I’d be surprised if the DOL’s administrative interpretation reflects any sort of drastic shift from prior guidance. So, assuming what we get from the DOL is clarification, if it’s been a while since you’ve analyzed whether your independent contractors are properly classified, don’t wait.

Misclassification can result in a huge unpaid overtime bill (plus liquidated damages). Thus, given the stakes, consider utilizing an outside professional, such as a lawyer, to help you out.

Image Credit: “US Dept of Labor” by Ed Brown – Ed Brown. Licensed under Public Domain via Wikimedia Commons.
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