HR Minute

Showing 5 posts by Steven J. Whitehead.

NLRB’s New Joint Employer Test Rewrites the Rules for Many Workplaces

The National Labor Relations Board’s (the “Board”) recent decision involving Browning-Ferris Industries of California (“BFI”), changed the standard under which the Board will find that two or more entities are joint employers of a single workforce. 

The Board’s decision claims it is merely returning the joint employment analysis to the traditional common law test for joint employment – but in order to achieve that “return,” the Board had to overrule about 35 years of its own precedent and to fundamentally alter the common sense understanding of what it means to have the “right to control” workers.

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The U.S. Department of Labor Increases FLSA Pressure

On July 15, 2015, the Administrator of the U.S. Department of Labor’s Wage and Hour Division (DOL) issued guidance regarding the proper classification of workers as independent contractors. The DOL claims that they are issuing the guidance because they are concerned that too many companies are misclassifying employees to escape overtime requirements, worker’s compensation and payroll taxes. The guidance is a reminder to employers that the DOL interprets the Fair Labor Standards Act (FLSA) broadly and that the DOL will take the position that the test for determining who is an independent contractor reflects that broad scope.

The guidance itself is detailed and heavily reliant on case-law that supports the DOL’s interpretation but also avoids contrary authority. The DOL opines that, based on the FLSA definition of “employ” as “suffer or permit to work,” and the manner in which federal courts have applied the “economics realities test,” that “most workers are employees under the FLSA’s broad definitions.” This conclusion follows that of at least one state, Vermont, whose Department of Labor has concluded that 99 percent of all workers working for Vermont employers should be classified as employees and not independent contractors.

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Fun and Games with Taxes, Social Security Numbers and Independent Contractors

Posted In Tax

Red pin marking the 15th on a calendarOccasionally employers are faced with applicants or employees who claim that they are “sovereign citizens” and that the federal government is illegitimate. Accordingly, the applicant or employee claims, they are not subject to governmental taxation and, therefore, their employer cannot withhold taxes or make required contributions on the employee’s behalf. Sometimes applicants or employees will make the argument (supported by reams of “supporting materials”) that the Sixteenth Amendment was not properly ratified by the States and therefore is unconstitutional. Both of these tax protests have been rejected by the courts and, if acted upon, can be a crime. Of course, there is no form of tax protest on which an employer can rely to forgo its duty to withhold and remit required taxes.

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An End to Overbroad EEOC Requests for Information or Subpoenas?

Cruise ship viewIt is fairly well-known that federal agencies dealing with employment-related matters have become more aggressive toward employers.  The Equal Employment Opportunity Commission (EEOC) is no different, and one of the tactics that the EEOC has begun using is to demand extensive information from employers even though such information is unrelated to the specific allegations in the charge.  The EEOC’s power to require employers to respond to such broad subpoenas has now been curtailed.  In EEOC v. Royal Caribbean Cruises, Ltd., the Eleventh Circuit Court of Appeals (which covers Georgia, Florida, Alabama and Mississippi) limited the reach of subpoenas issued by the EEOC. 

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Contracting with Staffing Companies

Posted In Staffing

Temporary Workers, Staffing Industry In today's business environment, the use of temporary workers is a given.  In fact, the staffing industry is projected to grow by 5-6% in 2014 according to Staffing Industry Analysts and in 2013, the American Staffing Association determined that temporary and contract staffing was a $109.2 billion dollar industry.  This growth is being propelled by the need of businesses to have flexibility in the number of workers that produce their goods and services. Given the reliance on temporary workers, companies who use such workers should consider who they contract with to provide their temporary staff and the contractual terms which they want to impose on their staffing partner.  First, selecting a staffing partner that is reputable and committed to legal compliance is critical.  Recent worksite deaths of temporary workers has caused the United States Occupational Safety and Health Administration ("OSHA") and the National Institute on Occupational Safety and Health ("NIOSH") to issue "Recommended Practices" that staffing companies and their clients should follow with regard to safety practices and training.  ttps://www.osha.gov/Publications/OSHA3735.pdf

These guidelines make it clear that with regard to safety in the workplace, both the staffing company and the client bear responsibility.  Therefore, it is more important than ever before that your staffing partner is the type that considers legal compliance, including compliance with workplace safety laws, as a priority. Second, staffing companies should be considered business partners and not insurance companies.  Often, companies using temporary staff will insist that the staffing company accept responsibility for all risks that might arise as a result of temporary workers from that staffing company being on-site, even if the risks having nothing to do with the services that the staffing company provides and even if the risks arise from the acts or omissions of the staffing client's employees.  In such situations, the client company is transferring its normal business risks to the staffing company.  As recognized by OSHA and NIOSH, such risk transfers may not be successful and contractual provisions that attempt to broadly transfer risk may give staffing firm clients a false sense of security.  Rather than attempting to transfer normal business risk from your business to your staffing provider, the better approach is for both companies to focus on legal compliance, ensuring a safe workplace and treating all workers appropriately.

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