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Don't HR Alone #14 - Independent Contractor Changes, and Arkansas Unemployment

Acosta withdraws informal guidance on independent contractors and joint employers — FEDERAL NEWS

On June 7, in a move not entirely unexpected, new Labor Secretary Andrew Acosta announced that the DOL’s 2015 and 2016 informal guidance on joint employment and independent contractors has been withdrawn. The removal of the administrator interpretations (which were not specifically named by formal title but easily identifiable to DOL watchers) does not change the legal responsibilities of employers under the FLSA and the Migrant and Seasonal Agricultural Worker Protection Act (MSPA), as reflected in the department’s long-standing regulations and case law, the DOL cautioned in a news release.

With the many changes wrought by the growing "sharing" or "gig" economy, the Obama Administration’s Department of Labor sought to evolve practices in a manner that would continue to ensure worker protections under laws that did not envision the employment relationships that mark the so-called "fissured" workplace becoming more and more common today. Opponents of these Obama-era efforts, however, viewed these practices as overreaching, going beyond statutory authority, and as potential, if not real, barriers to small businesses and job growth. Opposition to the policies embodied in the now withdrawn sub-regulatory guidance documents sparked several rounds of congressional committee hearings.

Independent contractor misclassification. Rolling back the Obama-era policies, Acosta has withdrawn Administrator’s Interpretation No. 2015-1, issued by former Wage and Hour Division Administrator Dr. David Weil on July 15, 2015. That guidance came down strongly on the side of finding an employment relationship as opposed to an independent contractor one. The WHD took the position that most workers are employees under the FLSA. The compliance assistance document focused on the economic realities test in light of the FLSA’s definition of "employment" as "to suffer or permit to work," discussed each factor in the economic realities test, and provided case law and examples to flesh out its interpretation.

Joint-employer test. Administrator’s Interpretation No. 2016-1 on joint employment, issued January 20, 2016, is also withdrawn. Under that informal guidance, the test for joint employment under the FLSA and the MSPA also uses the same expansive "suffer or permit" language found in the FLSA’s definition of employment. This test is broader than the common law test, broader than the test under the NLRA and the OSHA test—it "ensures that the scope of employment relationships and joint employment under the FLSA and MSPA is as broad as possible."

The DOL noted that in its announcement of the guidance withdrawals that it "will continue to fully and fairly enforce all laws within its jurisdiction, including the Fair Labor Standards Act and the Migrant and Seasonal Agricultural Worker Protection Act."4

Source: Written by Pamela Wolf, J.D.

Arkansas amends its UI law regarding the taxable wage base, maximum potential benefits, and separation payments — ARKANSAS — Unemployment Insurance

Arkansas.—Law amended. Arkansas has amended its Employment Security Law as follows:

Taxable wage base. Effective January 1, 2018, the taxable wage base in Arkansas will decrease to $10,000 from $12,000.

Maximum potential benefits. For intial claims filed on or after January 1, 2018, the maximum potential benefits of an insured worker in a benefit year will be the amount equal to the lesser of:

Sixteen (formerly 20) times his or her weekly benefit amount, or

One-third of his or her wages for insured work in the base period.

Separation payments. For initial claims made on and after January 1, 2018:

Separation payments are disqualifying for the number of weeks following the date of the separation that equals the number of weeks of wages received in the separation payment;

An armed services severance payment paid to a former member of the United States armed services is not disqualifying;

Remuneration paid as back pay in settlement of a claim or grievance and supplemental unemployment benefits are not disqualifying; and

The employer will specify the total amount of separation pay and the number of weeks of wages represented by the separation pay.

If the employer does not specify the number of weeks of wages, the Department will allocate the separation pay using the claimant's average weekly wage.

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