Construction Today - September/October 2017 - 118
By Brenna Hill and Michael Harvey
n June, the Department of Labor (DOL)
announced a dramatic departure from
its informal guidelines on classification
of independent contractors and joint
employers. These guidelines, issued during
the Obama administration, were not legally
binding, but served as a blueprint for how
the DOL enforced federal laws. They also
presented persuasive authority to courts.
Although the Trump administration has
not yet issued new guidelines, the DOL's
departure from the previous guidelines
indicates that it may be easier for employers
to classify individuals as independent contractors and that it will be more difficult to
hold one business liable for the employment
law violations of another company.
ment and civil rights law violations that occur at a separate company.
Before the Obama-era guidelines, companies faced liability under
laws like the Fair Labor Standards Act (FLSA) and the Migrant Seasonal Agricultural Worker Protection Act only if the company exercised
"direct control" over the employees at issue.
In 2015, however, the DOL issued informal guidance broadening
the "control" standard to include even those companies that exercise
"indirect" control over employees, significantly broadening the scope
of liability for businesses. Under this interpretation, a business entity
with very little control, if any, over an employee may be held liable
as a joint employer. This has proven worrisome for many businesses,
including franchisors and those who relied on staffing companies to
provide workers at a particular location.
The recent withdrawal of these guidelines means that companies
once again must have "direct control" over a worker to be held liable
as a joint employer in most contexts.
Joint employment refers to situations when
one business can be held liable for employ-
CONSTRUCTION-TODAY.COM SEPTEMBER/OCTOBER 2017
Whether a person is classified as an employee or an independent contractor affects many aspects of a working relationship. For example,
the distinction affects whether a business withholds employment