During the week of April 26, senior Labor Department officials discussed upcoming rules and initiatives. In a web chat, Nancy Leppink, deputy administrator of the Wage and Hour Division, stated that the agency will issue proposed rules covering numerous areas including companionship services, child labor and recordkeeping within the next 18 months. The proposed recordkeeping rules are the most imminent and are expected in August. Not surprisingly, these proposed rules will focus on the use/misuse of the independent contractor classification by employers. Ms. Leppink indicated that the rules should “enhance awareness among workers of their status as employees or independent contractors” and may even require employers to explain to any contractor the basis for a contractor, non-employee classification. In fact, a 2010 Regulatory Agenda Fact Sheet addressing the proposed recordkeeping regulations includes the following statement – “DOL is considering a proposed rule requiring covered employers to notify workers of their rights under the FLSA, and to provide information regarding hours worked and wage computation. Any employers that seek to exclude workers from the FLSA’s coverage will be required to perform a classification analysis, disclose that analysis to the worker, and retain that analysis to give to WHD enforcement personnel who might request it.” The Fact Sheet can be accessed via this link.
Ms. Leppink’s comments mirror those of Deputy Labor Secretary Seth Harris. At a conference, Mr. Harris discussed the DOL’s “misclassification initiative”, which encompasses various labor department agencies as well as the IRS and several state agencies. Mr. Harris stated that the goal of the initiative is to ensure “employers will no longer be able to opt employees out” of statutory and regulatory protections.
With an increasingly aggressive USDOL, employers must continue to take steps to ensure their practices, especially in regard to employee classification, comply with federal and, as applicable, state law.