Jeffrey (Jeff) H. Ruzal, Member of the Firm in the Employment, Labor & Workforce Management practice, in the firm’s New York office, was quoted in Bloomberg Law Daily Labor Report, in “Workers Poised to Score Benefits as DOL Rule Creates ‘Employees’,” by Sara Hansard.
Following is an excerpt:
The Department of Labor’s new rule making it harder to classify workers as independent contractors may mean more employers will be compelled to provide costly benefits like health care and paid leave.
The rule (RIN 1235-AA43), which takes effect March 11, officially only covers the status of workers under the Fair Labor Standards Act governing such factors as minimum wages and overtime. But the real-world spill-over effect is likely to mean businesses will move to treat more workers as nonexempt employees for wage and hour purposes, and for other purposes such as benefits, tax withholding, and anti-discrimination laws, employment attorneys say. …
FMLA should be made available to workers at a location where the employer has at least 50 employees within 75 miles.
But there are bigger potential benefits changes at the state level, where a patchwork of state and sometimes local laws govern paid sick leave and family leave, leaving the door open for newly classified employees to trigger coverage.
Thirteen states plus Washington, D.C., for example, now guarantee workers at least 12 weeks off annually in paid family and medical leave.
Ultimately, employers struggling to make classification and benefits decisions will have to closely watch how the new DOL test plays out in litigation, including a lawsuit challenging the DOL rulemaking itself. And more legal complaints are likely to spring up around individual workers’ misclassification allegations.
“What this new final rule does is it equips the courts, the DOL, with a test to determine whether an individual is in fact a bona fide independent contractor or not,” said Jeffrey Ruzal, a member of Epstein Becker & Green P.C.