DOL Announces Rollback of Policies on Joint Employment and Employee Classification
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On June 7, 2017, the Department of Labor (“DOL”) announced that it is withdrawing two administrative interpretations issued by the DOL under the Obama administration in 2015 and 2016 relating to misclassification of independent contractors and joint employment. These two administrative interpretations sought to expand the definition of "employee," thereby increasing the possibility of misclassification cases, and, as some argued, expanding the concept of joint employer under the Fair Labor Standards Act. While this is a welcomed announcement for employers, the DOL emphasized in the press release that the withdrawal “does not change the legal responsibilities of employers under the Fair Labor Standards Act.” This is the first effort by the DOL under the Trump administration to dismantle some of the more controversial policies issued by the DOL in the Obama-era. The decision to withdraw these administrative interpretations may also signal that the DOL intends to return to the opinion letter writing process, making compliance much simpler for employers.
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