Welcome to Kafka's Department of Labor

The Department of Labor's Wage and Hour Division has discontinued its practice of offering specific guidance to employers wanting clarification regarding independent contractor compliance.  It used to be that you could write in and get help understanding the intricacies of the law.  No more.

Instead, turning customer service on its head, the WHD may soon require employers--large and small, sophisticated and unsophisticated--to issue their own written opinion as to whether they are in compliance.  "Any employers that seek to exclude workers from the FLSA's coverage will be required to perform a classification analysis, disclose that analysis to the worker, and retain that analysis to give to WHD enforcement personnel who might request it."  That change appears to be in the "proposed rule making" stage.
I am reminded of Kafka's "The Trial," in which a man is arrested for a crime the nature of which is never explained to him.  Are you guilty of a crime?  The DOL won't tell you, but it will require you to write a confession of your possibly errant reasoning in advance. The inability to get definitive legal clarification will make hiring independent contractors yet riskier and more expensive--a no doubt discouraging development for those who have employed such contractors to good effect.  But it will be a positive boon to independent contractor compliance firms, law firms covering contingent labor issues, offshoring, as well as temp staffing. 
With regard to compliance firms in particular, last year's contingent staffing buyer survey indicated that 37% of buyers are currently using an IC screening/compliance vendor and another 34% said they may do so over the next two years--that would amount to a more than doubling in the use of this service.  In the current regulatory environment, buyer interest in such services can only be rising.


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