Last week, the Trump-era independent contractor classification rule was officially eradicated by the U.S. Department of Labor, (“DOL”) due to its apparent inconsistency with the Fair Labor Standards Act (“FLSA”). The rule, which we previously covered here, provided a 5-factor “economic reality” test for determining whether workers are independent contractors or employees. The two “core factors” of the test included the nature and degree of the worker’s control over the work and the worker’s opportunity for profit or loss. These factors focused on the worker’s control over the work and earnings based upon individual initiative or investment, making it easier for them to be classified as independent contractors.

Even though the Trump Administration issued the rule on January 7, 2021, intending for it to take effect on March 8, 2021, it never saw the light of day. The new Biden-administered DOL initially delayed the effective date until May 7, 2021, and on the eve of the new effective date, withdrew the rule in its entirety. Labor Secretary Marty Walsh, while acknowledging that classifying workers as independent contractors may be appropriate under some circumstances, stated that the five-factor test isn’t the right approach. After considering public comments, the DOL announced that the independent contractor rule was not “fully aligned with the FLSA’s text or purpose, or with decades of case law describing and applying the multifactor economic realities test.”

For the second time in two years, the U.S. House of Representatives recently passed the Protecting the Right to Organize Act, which would apply California’s ABC test to labor organizing. Although it faces an uphill battle in the Senate, employers should prepare for a ramp up enforcement of worker misclassifications under the new administration’s DOL, which will likely support efforts to establish a standard for independent contractors modeled after the employee-friendly ABC test.

Stay tuned to LaborDaysBlog.com to monitor more changes in employment and labor laws by the Biden administration.

President Biden announced that his administration had reached its goal of 200 million vaccine shots administered during his first 100 days in office. Not stopping there, the President also made a special call to employers across the United States to use their unique resources to help their employees and others get vaccinated.

To encourage more people to get vaccinated, President Biden, also announced a paid leave tax credit that will offset the cost for employers with fewer than 500 employees to provide full pay for any time their employees need to get a COVID-19 vaccination or recover from their vaccination.

Here’s an excerpt of the announcement:

A Tax Credit for Small and Medium-sized Businesses to Fully Offset the Cost of Paid Leave for Employees to Get Vaccinated and Recover from Any After-Effects of Vaccination. Under President Biden’s American Rescue Plan, a paid leave tax credit will offset the cost for businesses and nonprofits with fewer than 500 employees for up to 80 hours (i.e. 10 work days) up to $511 per day of paid sick leave offered between April 1 and September 30, 2021. This tax credit will allow these employers to provide paid leave for employees to get a COVID-19 vaccination and for any time their employees may need to recover from that vaccination at no cost to the employer. This tax credit will apply to nearly half of all private sector employees in America. The Internal Revenue Service (IRS) has released and posted a fact sheet to educate employers on how to claim the paid sick leave credit on their quarterly tax filings. For more details on how the vaccination-paid leave tax credits from the American Rescue Plan will work for employers to enable employees to get vaccinated and recover from after-effects of vaccination, as well as for other purposes, please consult this snapshot from the Department of the Treasury.

Tuesday, May 18th at 12:30pm ET

Wage & Hour Laws: How To Avoid Common Pitfalls

The DOL’s Wage and Hour Division recovered a record $1.4 billion in back wages for workers in the past 5 years. According to the WHD, that’s an average of $1,120 for each employee. Suffice it to say that your company’s potential liability under wage-and-hour laws continues to be very real, and very expensive.

Happily, much of this risk can be reduced with the right policies and practices in place—if you know what to look for in an ever-changing regulatory and enforcement environment.

Join the Kelley Drye Labor and Employment team for as we help participants look for their next big litigation risk by helping them find their blind spots.

  • Misclassifying non-exempt employees as exempt from overtime requirements
  • Failing to recognize what time is compensable
  • Misclassifying employees as independent contractors
  • Getting tripped up on differences between federal and state laws

CLICK HERE TO REGISTER FOR THIS WEBINAR

Paid sick and family leave is expanding. The ongoing COVID-19 pandemic, and the special pressures it has placed on parents and families, has renewed the push for mandated paid sick and family leave. Congress’ decision not to expand the Families First Coronavirus Response Act (FFCRA) in the latest relief package, has spurred state and local governments to renew their efforts to provide COVID-19 paid sick leave and, in some cases, permanent paid sick leave.

Also, is it safe to assume the federal government is not planning to pass a paid sick leave mandate? After all, the Federal Employee Paid Leave Act, which passed in 2019, was just expanded in October 2020. The answer is no, because all signs indicate that a paid federal leave mandate for private employers will be on the horizon during the Biden administration. But until that time comes, employers with a national or multi-state presence will need to comply with a hodgepodge of state and local laws. Continue Reading Paid Sick Leave Trends: States and Localities Step In Where Federal Law Falls Short

The American Rescue Plan Act (ARPA), signed into law on March 11, 2021, requires employers to provide free COBRA coverage to employees (and family members) who qualify for COBRA due to an involuntary termination of employment or reduction in hours.  Employers are required to offer free COBRA coverage between April 1 and September 30, 2021 (the “Subsidy Period”).  This Advisory discusses employer obligations related to the subsidy – including new COBRA election periods and new COBRA notices – and how employers will be reimbursed for this 100% subsidized COBRA coverage through a payroll tax credit. Continue Reading COBRA Subsidies Under the American Rescue Plan Act

For years, employee interest in unions has dwindled. But a pandemic, persistent income inequality and high unemployment—not to mention the most pro-union Presidential administration in generations—have all converged to flip that script.

5,800 workers at an Amazon warehouse in Bessemer, Alabama are currently voting whether to join a union in an election that runs through March 29th. The current unionization efforts have captured national attention and drawn support from both sides of the aisle, including Republican Senator Marco Rubio. A win in the election would be a major victory for the labor movement. Amazon is the second-largest private employer in the United States, and it has avoided unionization at all of its U.S. facilities up to this point. Is this recent unionization effort a reflection of a larger change brewing in the labor world?

Continue Reading Are Unions Primed for a Comeback?

As we have previously noted on this blog, a central aim of the Trump administration was to take aim at—and rescind—Obama-era labor rules. The Trump Department of Labor (DOL) took what was perceived as a consistently pro-business stance, reversing worker-friendly Obama-era rules and issuing new rules favorable to employers. With the proverbial pendulum now swinging back towards worker protections under the Biden administration, two rules with a significant impact on employers are likely to change: independent contractor/employee classifications, and the “joint employer” doctrine. Continue Reading The DOL Announces Plans to Rescind Two Final—and High-Impact—Rules

Forget speculation about what is to come: the Biden administration has already acted to unravel the Trump legacy in employment and labor regulation—and to expand worker protections.

Join us on April 15, 2020 at 12:30 p.m. ET for a complimentary webinar, where we will take a deep dive into the regulatory changes immediately impacting your business.

Thursday, April 15th at 12:30pm ET

This Is Happening: Immediate Employment Law Impacts under the Biden Administration

This webinar will address immediate, real-time impacts of new employment regulation on your business now, including:

  • Significant changes to overtime classifications and wage & hour regulation
  • Expansion and extension of COVID-19 laws and regulations
  • Independent contractor classification rules
  • Easier union organizing, and a more pro-union National Labor Relations Board
  • Increased OSHA enforcement
  • And others . . .

Click here to register

On Friday March 12, 2021, Governor Cuomo signed into law legislation which requires that beginning March 12, 2021, all New York employers must provide up to four hours of paid leave per COVID-19 vaccine injection. Below are the salient features of the new law:

Who is covered?

All employees irrespective of employer size or industry.

What amount of leave are employees entitled to?

Up to four hours off per vaccine injection, paid at the employee’s “regular rate of pay.”

The law does not specifically address how much time an employee is entitled to if the vaccine requires two injections, but the law is drafted as permitting leave “per vaccine injection,” thus employees who receive a two shot vaccination could be entitled up to eight hours of paid leave.

When does the law expire? Continue Reading NY Employees Granted Up to Four Hours of Excused Leave Per Vaccine Injection

On January 12, 2021, the Department of Labor (DOL) issued long-awaited guidance for retirement plan fiduciaries that is relevant to any employer who sponsors a retirement plan that is subject to the fiduciary requirements of ERISA, including 401(k), 403(b), profit sharing, and defined benefit pension plans.  Of particular import, the guidance addresses best practices for locating and distributing retirement plan benefits to missing or non-responsive participants. The DOL also includes other helpful guidance, as discussed in more detail below.
Continue Reading DOL Issues Guidance on Missing Participants for Retirement Plans