On June 7, 2017, new U.S. Secretary of Labor Alex Acosta announced the federal Department of Labor’s withdrawal of two significant guidance documents from the previous administration: (1) a 2015 memorandum addressing misclassification of employees as independent contractors; (2) 2016 guidelines regarding joint employment. This may be an early indication of what to expect from the Trump DOL.

These actions do not formally change the law or determine the DOL’s position in any given situation. Rather, they signal the pro-employer shift in federal labor policy that was expected with the change to a Republican administration.

Misclassification

A July 2015 memorandum from then-head of the DOL’s Wage and Hour Division David Weil emphasized that most workers qualify as employees under the Fair Labor Standards Act. Accordingly, they enjoy protections regarding minimum wage and overtime that do not apply to independent contractors.

The withdrawal of that memorandum does not mean that employers are now free to classify workers as independent contractors at their discretion. However, it may indicate that the current administration will be less likely to assume that a worker is an employee.

Employers still must be careful to classify workers properly. Regardless of the DOL’s enforcement positions, most workers do qualify as employees under the FLSA. Moreover, individuals can litigate their employment status directly through the courts without DOL involvement.

In addition, the U.S. DOL does not interpret and administer all laws for which classification is relevant. Most notably, state laws also provide for similar protections in many states, and some states, including New York, remain pro-employee in their enforcement.

Joint Employer

In August 2015, the National Labor Relations Board expanded its doctrine of joint employership in a case involving Browning-Ferris Industries of California Inc. This decision (from a Democrat-majority NLRB) meant that employees could more easily hold multiple entities responsible as their employers.

Although the Browning-Ferris decision itself only affected NLRB cases, the U.S. DOL used it as the impetus to expound on a broader notion of joint employership under the laws it administers, including the FLSA. In January 2016, the DOL’s Wage and Hour Division issued guidelines purportedly addressing increasingly varied employment arrangements in the modern workforce. The thrust of the guidelines was to establish a basis for holding more organizations responsible to their workers.

Secretary Acosta’s withdrawal of these guidelines suggests a relaxation of the approach announced last year by the DOL. However, it has no direct impact on the question of joint employer liability under the National Labor Relations Act. For now, Browning-Ferris remains the NLRB’s current position on the issue. But at some point the President will fill current vacancies on the NLRB. This will shift the Board back to a Republican majority. Thus, it is quite likely the the NLRB will also relax its joint employer standards post-Obama.

More To Come from the Trump DOL

These early actions support the assumption that Secretary Acosta will act to reduce employer burdens. Another significant issue remaining open is how the Trump DOL will handle the Obama Administration’s regulations on the salary threshold for overtime exemption. Those rules were enjoined by the courts last year, but currently have pending appeals. It seems likely that the the current administration will take a different position.  But exactly what that will be and how it will be implemented remains to be seen.

Keep following the New York Management Law Blog to learn more about developments in federal wage and hour law (among other topics).

This is the first post in a series discussing some basic employment law terms. I hope this will help employers better understand the words that frequently come up in employment law. If there’s a term you’re wondering about that isn’t discussed here, let me know.

A

“ADA”:  The federal Americans with Disabilities Act. This law prohibits employers with 15 or more employees from discriminating against employees based on disability.

“ADEA”:  The federal Age Discrimination in Employment Act. This law prohibits employers with 20 or more employees from discriminating against employees 40 years old or older on the basis of age.

“Affirmative Action”:  A requirement that an employer take proactive steps to improve the diversity of its workforce. This typically only applies to companies with government grants or contracts.

“ALJ”:  An Administrative Law Judge. Many different state and federal administrative agencies use these judges to preside over hearings.

“Arbitration”:  An alternative dispute resolution process where a neutral arbitrator decides the outcome. This is the common final step in grievance procedures between employers and unions. Individual employees can also agree to substitute arbitration for court litigation.

“Arbitrator”:  The decision-maker in arbitrations. The parties usually mutually select the arbitrator(s) to avoid bias and partiality.

“At-will”:  Most employees have at-will employment. This means that both they and their employer can terminate the employment at any time, for any reason, with or without notice. (But this doesn’t really mean employers can fire employees for any reason. See, for example, my post on responding to employment discrimination complaints.)

B

“Back Pay”:  A common remedy for violations of employment law. Employees who prove illegal termination often recover lost wages and benefits going back to the date of termination.

“Ban-the-box”:  Laws that prohibit employers from asking job applicants whether they have been convicted of a crime early in the hiring process. Check out this post for more on ban-the-box laws in major New York cities.

“Bargaining Unit”:  The group of employees represented by a union for the purpose of negotiating terms and conditions of employment with their employer. Some employers have multiple bargaining units in the same facility.

C

“CBA”:  A collective bargaining agreement. This is a common term for the contract between an employer and union regarding the terms and conditions of employment.

“COBRA”:  The Consolidated Omnibus Budget Reconciliation Act of 1985. The name doesn’t really help here. . . . (Not this or this.) This is the federal law that permits employees to continue health insurance (at their own cost) for a period of time after leaving a job. It applies to employers with 20 or more employees. However, some states, including New York, have similar laws that cover smaller employers.

“Concerted Activity”:  When employees work together regarding terms and conditions of employment. In most industries, the National Labor Relations Act protects non-supervisory employees’ right to engage in concerted activity for their mutual aid and protection.

“Constructive Discharge”:  The term for what happens when an employer permits working conditions so intolerable that an employee has no choice but to quit. This usually involves ongoing or extreme harassment that violates employment discrimination laws.

“Continuing Violation”:  When harassment or discrimination occurs over a period of time rather than as isolated incidents. A continuing violation can extend the period of time that an employee has to make a legal complaint of discrimination.

More Employment Law Terms Coming Soon

Stay tuned for the next installment of employment law terms: D-?

If this has been helpful, please sign up for my email newsletter to make sure you receive all the installments in this series.

If you think I’m missing any employment law terms that should be included above, please email me to let me know.