San Francisco partner Cheryl Orr was recently quoted by Law360 about the U.S. Department of Labor’s newly issued guidance on how to determine the whether to designate a work as an independent contractor or an employee under the Fair Labor Standards Act.
The guidance is expansive and favors the classification of workers as employees under the Fair Labor Standards Act. Cheryl’s commentary noted that the guidance applied the “economic realities” test but gave no more weight to any of the six underlying factors. This is in contrast to some state laws like California where the state agency takes the position that “in applying the economic realities test, the most significant factor to be considered is whether the person to whom service is rendered (the employer or principal) has control or the right to control the worker both as to the work done and the manner and means in which it is performed.” Accordingly, Cheryl advised that employers need to continue to analyze and correctly apply the varying tests.
Read Cheryl’s full response to the Department of Labor’s employee misclassification guidance.