From JDSupra, Fisher Phillips did an excellent job compiling the top workplace stories for 2019. These are the ones most relevant to independent contractors.
4. Independent Contractor Rules Rewritten In California – The California legislature approved a controversial new law on September 11 that will reshape the way businesses across the state classify workers. While supporters of the bill have emphasized its impact on independent contractors, the bill also severely impacts legal obligations governing businesses that hire other businesses. In short, the law will make it much more difficult for many companies to treat workers in California as independent contractors, and more difficult for businesses to hire smaller, entrepreneurial businesses. The governor signed the law into effect on September 18, meaning hundreds of thousands of workers across the state will be entitled to increased pay, benefits, and employment law protections – not to mention the possibility of organizing into labor unions. Many businesses, especially those in the gig economy, will need to radically restructure their operations or transform these workers into employees in order to comply with the law. What do you need to know about these developments? (read more here)
6. New California Law Prohibits Most Mandatory Arbitration Agreements—For Now – Despite his predecessor vetoing two similar proposals, California Governor Gavin Newsom signed a bill into law on October 10 that will prohibit employers from entering into mandatory arbitration agreements for nearly all types of employment law claims in California. The new law could have significant impacts on California employers across all industries – if it ever goes into effect. There are significant questions around whether the new statute is invalid. We could see it scaled back or completely tossed out before ever being enforced based on an argument that it is preempted by federal law. Legal challenges are inevitable, and will likely require years of litigation before a final resolution. In the meantime, what do California employers need to know about this development? (read more here)
9. Labor Department’s Proposed Four-Factor Rule Would Limit Joint Employment – The U.S. Department of Labor became the latest federal agency to propose a rule to limit the scope of joint employment liability, this time for wage and hour matters. If the rule released on April 1 is adopted in its current form, the USDOL would examine whether a business is a “joint employer”—equally liable for liability under federal wage and hour laws—through the use of a four-factor balancing test, assessing whether the potential joint employer:
- hires or fires the employee;
- supervises and controls the employee’s work schedule or conditions of employment;
- determines the employee’s rate and method of payment; and
- maintains the employee’s employment records.
If this rule is adopted, it would almost certainly mean that fewer businesses would be found to be a joint employer by a court or agency when it comes to minimum wage, overtime, and other similar liability under the Fair Labor Standards Act (FLSA). The Labor Department’s move is in the same vein as the proposal unveiled by the National Labor Relations Board in September 2018, which also aims to fundamentally alter the definition of joint employment in matters related to unionization purposes. What do employers need to know about this development? (read more here)
15. Labor Board Makes It Easier To Classify Workers As Independent Contractors – In a significant ruling which will benefit companies, the National Labor Relations Board revised the test it uses for determining whether workers are employees or independent contractors by making it easier for entities to classify them as contractors (SuperShuttle DFW, Inc.). The January 25 decision threw a roadblock into unionization efforts involving such workers, as federal law does not permit independent contractors to unionize or join forces with employees in organizing efforts. What do employers need to know about this development? (read more here)
16 .End of the Road: SCOTUS Ruling Means Many Transportation Workers Are Now Exempt From Arbitration – In a unanimous 8-0 decision, the Supreme Court ruled on January 15 that federal courts can’t force interstate transportation workers—including contractors—into arbitration, ruling that the Federal Arbitration Act’s Section 1 exemption for these workers is a threshold question for the court to resolve, not the arbitrator. Perhaps more importantly, the Court also applied the Section 1 “contract of employment” exemption from the FAA to include not only interstate transportation workers with employment agreements, but also to those interstate transportation workers with independent contractor agreements (New Prime Inc. v. Oliveira). Nearly 1 million men and women work as truck drivers nationwide. This ruling could open the floodgates to a host of new class and collective action lawsuits against interstate transportation employers in federal and state courts; employers in this industry should immediately coordinate with their labor and employment counsel to determine how this development might affect them (read more here).
19. Time To Revisit Arbitration Agreements: Employers Dealt A Blow By Unanimous Labor Board – Employers may be surprised to learn that the Republican-controlled National Labor Relations Board issued a unanimous decision invalidating an employer’s mandatory arbitration agreement that could be reasonably interpreted as preventing employees from filing charges with the Board. The June 18 Prime Healthcare decision analyzed the employer’s arbitration agreement using the relatively new Boeing Co. standard for evaluating facially neutral policies and rules that potentially interfere with employees’ protected rights, but fell on the side of the workers. The decision may require you to adjust your arbitration agreements to ensure you stay on the right side of the law (read more here).
21. Misclassifying Workers No Longer Constitutes An Unfair Labor Practice – Employers found to have misclassified employees as independent contractors will no longer face the prospect of unfair labor practice charges for such actions alone, according to a new ruling handed down by the National Labor Relations Board. Although the NLRB’s previous General Counsel and several administrative law judges had previously concluded that hiring entities could face the one-two punch of misclassification litigation followed by a federal labor law violation, the current Board wiped this concern off the table with its August 29 ruling in Velox Express, Inc. What do businesses need to know about this positive development? (read more here)
22; Supreme Court Dims The Light On Class Arbitration – By a 5-to-4 vote, the Supreme Court ruled on April 24 that the Federal Arbitration Act does not allow a court to compel class arbitration when the agreement does not clearly provide for it. As a result, employers whose valid arbitration agreements do not contain an explicit class action waiver (assuming they do not expressly consent to class arbitration) can rest easy knowing that the agreements allow them to compel alleged class claims to individual arbitration (Lamps Plus Inc. v. Varela) (read more here).
35. Supreme Court’s Decision Not To Review California’s Arbitration Framework Means We Have A Roadmap For Compliance – The U.S. Supreme Court did something that was more than just a bit out of character—it rejected the opportunity to find that California had once again overstepped its bounds by creating judicial rules disfavoring arbitration. It did so by rejecting the highly watched petition for certiorari that arose from Ramos v. Winston & Strawn. The October 7 determination not to take up the case for review means that we will have to live with the current state of affairs for the time being, but we now have a solid game plan for crafting arbitration agreements that comply with state law (read more here).
46. Department Of Labor Says Certain Gig Workers Are Contractors – In a major positive development for gig economy businesses, the U.S. Department of Labor issued an opinion letter on April 29 confirming that certain workers providing work for a virtual marketplace company are, indeed, independent contractors. While this letter can only be used as an authoritative legal defense by the specific (unnamed) gig economy business that requested the letter, this publication still provides the federal government’s official interpretation on whether a certain business model or practice complies with the law. We now have a solid understanding of how the current USDOL views the misclassification question and will approach it from an enforcement perspective, and the news is all good for gig businesses (read more here).
Read the full story at Top 50 Workplace Law Stories Of 2019 | Fisher Phillips – JDSupra