Guidance on Joint Employment and Independent Contractors

Posted by BAS - 13 July, 2017

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The U.S. Department of Labor withdrew two guidance letters issued in 2015 and 2016 addressing joint employment and independent contractors. The reversal of the DOL guidance is generally welcome news for employers.

One guidance letter addressed when employers would be considered “joint employers” of a worker. This letter changed existing guidance and advised that indirect control over an employee could be considered joint employment. Prior to the 2016 letter, an employer had to have “direct control” over an employee.

The second guidance letter had indicated that “most workers are employees” (and not independent contractors). This was alarming employers who were not withholding employment taxes and satisfying wage and hour laws for workers they had considered in the past to be independent contractors. With the withdraw of the letter, the definition of independent contractor is again expanded.

Employers should continue to properly classify their workers, but now have more flexibility on categorizing a worker as an independent contractor and analyzing their joint employer status.


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