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DOL: Moving Ahead with “Contractor Status” Initiative

The Department of Labor failed to meet its original April target for releasing a Notice of Proposed Rulemaking for its proposed “Plan / Prevent / Protect” regulation, which would be a major overhaul of DOL enforcement under several agencies, touching on health and safety, mining, and construction, among others. The one we are most concerned about is the “Right To Know” initiative, which proposes the introduction of new enforcement tools for DOL’s Wage and Hour Division.

DOL has recently posted a “Fact Sheet” on the forthcoming “Right To Know” rule on its web site, at this link. In the Fact Sheet’s words, “DOL is considering a proposed rule requiring covered employers to notify workers of their rights under the [Fair Labor Standards Act], and to provide information regarding hours worked and wage computation. Any employer that seek to exclude workers from the FLSA’s coverage will be required to perform a classification analysis, disclose that analysis to the workers, and retain that analysis to give to [Wage and Hour Division] enforcement personnel who might request it.” One reading of this text might lead one to suppose that the point of issue is to determine whether an acknowledged employee is exempt or non-exempt from FLSA coverage—as many employees are (such as supervisory or professional employees).

However, the Fact Sheet’s final paragraph makes it clear that DOL also intends to use this “Right To Know” rule to address independent contractor status determination, too: “Updating the recordkeeping requirements to promote transparency is expected to encourage greater levels of compliance by employers, to enhance awareness among workers of their status as employees or independent contractors and employee rights and entitlements to minimum wage and overtime pay, and to facilitate DOL enforcement.”

FRA and the Coalition To Preserve Independent Contractor Status question the legal authority of DOL to require a service recipient to prepare such a document for an independent contractor. We are working with members of the majority staff of the House Education and the Workforce Committee to set up a meeting with DOL to request an explanation of this point, as well as further details of its proposal, prior to the publication of the anticipated Notice of Proposed Rulemaking.