Joint employment, independent contractor classification and the fate of the Affordable Care Act each saw recent developments.
Joint Employment. The US Department of Labor Monday announced a proposed rule [1] to revise and clarify the responsibilities in joint-employer arrangements.
Per the proposal, the DOL would evaluate an employment relationship based on four factors when making joint-employment determinations. The four factors would include whether the employer had the power to: hire or fire the employee; supervise and control the employee’s work schedules or conditions of employment; determine the employee’s rate and method of payment; and maintain the employee’s employment records.
“This proposal will help clients of staffing firms to understand where the red lines need to be drawn in relation to responsibility for the staffing firm employees if they want to avoid joint employment in relation to the Fair Labor Standards Act,” said Fiona Coombe, SIA’s director of legal and regulatory research. “However, there is still uncertainty as to how joint employment arises in relation to other laws such as the National Labor Relations Act.”
Read the full story [2] in the SIA Global Daily News.
Affordable Care Act. The full Affordable Care Act came under renewed fire last week as the US Department of Justice filed a letter with the Fifth Circuit Court of Appeals on March 25 stating it agrees with a Texas judge who ruled the law is unconstitutional, the SIA Global Daily News reported.
While the letter signals the DOJ’s intent not to defend the law in court, Attorney George Reardon told Staffing Industry Analysts “it will be hard, even with administration support, to convince higher courts that all of the 2,000-page law’s insurance provisions and all of its infrequently-discussed provisions regulating healthcare itself must also fall, especially since Chief Justice Roberts prefers narrow decisions,” Reardon said. “Fortunately, the slow legal appeals process should give Congress and the Administration enough time to construct either a replacement for a voided ACA or a program for reforming the existing ACA.”
In the meantime, the IRS is actively enforcing ACA penalties, Reardon notes. Read the full story [3] in the SIA Global Daily News.
Independent contractor classification. The California legislature is one step closer to codifying the state Supreme Court’s Dynamex ruling that redefines how independent contractor classification will be determined. Assembly Bill 5, which was introduced in December by Democratic Assembly Member Lorena Gonzalez Fletcher in December, “creates a presumption that a worker who performs services for a hirer is an employee for purposes of claims for wages and benefits arising under wage orders issued by the Industrial Welfare Commission.” The Los Angeles Times reports [4] that while some business types are being granted exemptions, the “new law is unlikely to exempt Uber, Lyft and other app-based technology companies.”