With a newly elected Republican President, it has been widely expected that the administrative agencies responsible for enforcing federal employment laws would begin to take a more “business friendly” approach. That sentiment was confirmed with the U.S. Department of Labor’s (“DOL”) announcement that it has withdrawn its written administrator interpretations addressing joint employment and the misclassification of employees as independent contractors. The DOL’s Wage and Hour Division had previously issued the administrator interpretations in July 2015 and January 2016 in which it discussed its enforcement position for determining an independent contractor and joint employment relationship under the Fair Labor Standards Act (“FLSA”). The interpretations broadly defined coverage for employees under the FLSA, and thus created a greater liability exposure for employers. The DOL’s prior joint employment guidance was discussed in an earlier e-alert which can be found here: U.S. Department of Labor to More Aggressively Use “Joint Employer” Status to Impose Greater Overtime Liability Upon Employers.
Despite withdrawing the administrator interpretations, the DOL has emphasized that employers are still responsible for complying with the FLSA and the agency’s enforcement efforts under that statute will continue. Therefore, although the DOL is reverting back to a more moderate approach for determining joint employer and independent contractor status, employers should still be mindful of their potential FLSA liability and continue to remain diligent in properly structuring those relationships. Additionally, the DOL announcement does not preclude employees from pursuing a private right of action under the FLSA and state law.