DOL Grants Could Signal More Misclassification Actions

From Manatt, Phelps & Phillips, LLP and JDSupra.

“DOL Grants Could Signal More Misclassification Actions

Why it matters: Employers have faced a tidal wave of litigation over the alleged misclassification of employees as independent contractors, with workers ranging from FedEx drivers to National Football League cheerleaders challenging their status. Now employers should brace themselves for similar actions from state regulators. The Department of Labor (DOL) announced the award of more than $10 million in grants to 19 states – including California and New York – to “enhance states’ ability to detect incidents of worker misclassification” while “ensuring workers receive appropriate rights and protections,” Labor Secretary Thomas E. Perez explained. Several states have existing programs designed to reduce worker misclassification, the DOL noted, but this is the first time the agency has awarded grants dedicated to the effort. Facing the threat of action from plaintiffs’ attorneys as well as federal and state authorities, employers should take the time to ensure that workers are correctly classified, remembering that the question of whether a worker is an employee or independent contractor requires a multifactor analysis of issues such as the amount of control an employer exercises over the worker and whether the worker performs work customarily performed by the employer….”

Read the full story at Employment Law – Oct 2014 #3 

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