The Department of Labor (DOL) announced that on March 11, 2024, a new rule, 89 FR 1638, will go into effect restoring the multifactor analysis used by courts for decades in determining if an individual is an employee or Independent Contractor (IC) under the Fair Labor Standards Act (FLSA). 

Misclassifying workers as ICs rather than employees can result in wage claims with liquidated damages and attorneys' fees under the FLSA, which can be catastrophic for business to continue to exist. Simply, you have to get it right and ICs that are misclassified have excellent cases because liquidated damages are two (2) times the amount not received. 

This new rule is being announced because DOL had concerns about the 2021 IC Rule where it did not fully align with the FLSA's text and purpose. 

The six factors under the New Rule are:

1. Opportunity for profit or loss
2. Financial stake and nature of resources invested in the work
3. Degree of permanence of the work relationship
4. Degree of control the employer has over the person’s work
5. Whether the work is essential to the employer’s business
6. Worker’s skill and initiative

This new rule provides a consistent approach for conducting business with ICs and employes. 

You can read the Department of Labor's release on this new law here. You can read the final rule here. 

If you are interested in wage and hour claims, or better yet if you are a business owner or manager, you are going to want to read this. 

On October 13, 2022, the Department of Labor opened the comment period, which runs through November 28, 2022, for it's revised analysis to determine if an individual is an employee or an independent contractor for a wage and hour claim (i.e., misclassification claim). As a reminder, independent contractors are also known as self-employed workers and freelancers, and are considered to be in business for themselves and therefore, not entitled to minimum wages and overtime pay under the Fair Labor Standards Act (FLSA). 

However, if an employer gets this wrong, by considering an employee an independent contractor, tht employer can be subject to penalty, called liquidated damages, and more. It's a catastrophic mistake that really needs to be avoided at all costs. 

The Proposed Rulemaking is available here in full.

Comments can be made electronically at Federal eRulemaking Portal at https://www.regulations.gov.

In summary, the Proposed Rulemaking is attempting to reassert the Economic Reality Test, where "[t]he ultimate inquiry is whether, as a matter of economic reality, the worker is either economically dependent on the employer for work (and is thus an employee) or is in business for themself (and is thus an independent contractor)." In analyzing the test, the following, non-exclusive facts are generally examined, including: "the opportunity for profit or loss, investment, permanency, the degree of control by the employer over the worker, whether the work is an integral part of the employer's business, and skill and initiative." Under the Proposed Rulemaking, the Department of Labor will examine the factors in the Economic Reality Test by returned to a totality-of-the-circumstances analysis rather than focusing on core factors. No longer will two factors be considered most probative and carry greater weight. Now, all factors matter and should be analyzed when determining whether a worker is an independent contractor or an employee who is subject to rights under the FLSA. 

 According to the Second Circuit:

This Court entered a temporary injunction in the above-captioned case on Friday, September 24, 2021 for administrative purposes pending decision by a three-judge panel. IT IS HEREBY ORDERED that the September 24 injunction is DISSOLVED. IT IS FURTHER ORDERED that the motion for an injunction pending appeal is DENIED.

That said, not getting vaccinated does not equal automatic termination. 

As the City explained in their opposition to the injunction, "even employees who object to vaccination... can elect to stay home and retain their positions while being placed on unpaid leave with healthcare until early September 2022... And even if plaintiffs decline the extended leave option, the earliest any steps would be taken to terminate their employment would occur in December 2021." 

So, "employees who fail to submit proof of having received one dose of vaccination by September 27, 2021, are to be placed on unpaid leave with health insurance the following day. [internal citation] But an employee who submits proof of vaccination before November 30, 2021, will be able to return to work within a week. [internal citation] And an employee who submits proof of vaccination thereafter, but before September 5, 2022, will be able to return to work within two weeks." 

As to accommodations, the City is granting accommodations "for a religious or medical" needs. However, an underlying arbitration on the matter set "an alternative to any statutory reasonable accommodation process... for the 2021-2022 school year" where the deadline for "any requests to be considered as part of this process... [was] no later than Monday, September 20, 2021, by 5:00 p.m." Therefore, any school employee who has not yet applied for an accommodation, CANNOT get one. 

The City's opposition summed this entire situation up nicely where it stated, "Put bluntly, plaintiffs do not have a substantive due process right to teach children without being vaccinated against a dangerous infectious disease."

Many more disability lawsuits are anticipated after the 2nd Circuit ruled that temporary injuries qualify as disabilities under ADA. 

An injury that only lasts 19 days can constitute a qualifying disability for purposes of a failure-to-accommodate claim under the Americans with Disabilities Act, according the Second Circuit Court of Appeals in Hamilton v. Westchester Cnty. 

For background, disabled individuals have a legal right to demand a reasonable accommodation from rules, policies, and procedures so that they can have equal access to public services, enjoyment of property, and opportunities at work. 

When disabled individuals are denied rightfully requested accommodations, lawsuits happen for big $$. 

When disabled individuals aren't provided with a forum to negotiate an accommodation, known as the interactive process, lawsuits happen for big $$. 

When disabled individuals aren't even provided with an opportunity to request an accommodation in the first place (such as by a form or notice), lawsuits happen for big $$. 

Simply, disability discrimination law is a really big deal, with big numbers at stake, to employers and property owners / managers. In fact, 26% of US adults have some sort of disability according to the CDC. As a result, every employer and property owner / manager must understand this new change in the law. 

Before this case, it was unclear in the Second Circuit, which controls NY, CT, & VT, whether an individual with a short-term disability from an injury could qualify for an accommodation under the law. 

Now, we know that they qualify. 

While the case before the Circuit Court was about an inmate at the Westchester County Jail, who claimed a denial of an opportunity to participate in or benefit from services, programs, or activities, under Title II of the ADA, the takeaway is that temporary disabilities can trigger the protections of the ADA under all three of its Titles, including:

• Title I - Employment & Hiring
• Title II - Public Services, Programs, & Activities
• Title III - Public Accommodations (i.e., commercial property & websites) 

It is clear that the Circuit Court intended all three Titles to apply to temporary disabilities because it expressly based its decision on the 2008 ADA Amendments Act, which broadened the definition of "disability" under the ADA to include temporary or Transitory injuries. In so reasoning, the Circuit Court pointed to 28 CFR 25.108(d)(ix) (i.e., the regulations to the ADA) to find that a "'disability' shorter than six months in duration now can be actionable under the ADA." 

Now, all employers, property owners, brokers, property managers, and governmental officials in NY, CT, & VT better adjust their policies and afford rights to those disabled from injuries (even really short-term injuries) or they are going to get sued?

Have you ever been denied your rights to have policies adjusted to enable you to have the full enjoyment of life, which was otherwise problematic because of your disability?

Shouldn't disabled people be given every benefit to fully enjoy life?

This is good law.

During the last two weeks of his Presidency, Trump's Department of Labor just revised the test for whether an individual is an independent contractor or employee under the Fair Labor Standards Act. 

This is significant because employees are entitled to minimum wage and overtime whereas independent contractors are not. 

If an employer misclassifies a staff member as an independent contractor when such staff member should be classified an employee, it can result in a devastating blow to the employer who will be exposed to statutory penalties, back pay, attorneys' fees and more. 

Now, Trump's government is using the "economic reality" test to determine employee status. 

According to the government, "the ultimate inquiry is whether, as a matter of economic reality, the worker is dependent on a particular individual, business, or organization for work (and is thus and employee) or is in business for him- or herself (and is thus an an independent contractor)." 

Under this test, the Department of Labor or a Court hearing the case will look to five distinct factors to answer the test. However, two of those factors now have more probative value in answering the question than the rest. These two key factors are:

1. The nature and degree of the worker's control over the work; and
2. The worker's opportunity for profit or loss.