2021 continues the trend of increasing regulation of the workplace by state and local governments. Although it is not possible to discuss all state and local laws, this update provides an overview of recent and upcoming legislative developments to help you and your organization stay compliant. (Please note that developments specifically related to minimum wage rates and COVID-19 are not included.)
The second quarter of 2021 continues the trend of increasing regulation of the workplace by state and local governments. Several new and revised state and local workplace regulations became effective or will soon be effective, including a trend towards a broader inclusiveness in leave laws. This update reviews these new requirements and recaps Q2 state and local employment law developments to help you and your organization stay in compliance.
On September 22, 2020, the U.S. Department of Labor (DOL) issued a new proposed rule that would substantially simplify the test for determining whether persons are employees or independent contractors under the Fair Labor Standards Act (FLSA).
Because the FLSA does not actually define “employee,” courts have traditionally filled the void by applying an “economic realities” test that balances several factors. But in issuing a new proposed rule, the DOL noted that the current balancing test is difficult to apply, creates confusion, and is out of step with modern technology and working relationships.
For the full alert, visit the Faegre Drinker website.
On January 21, 2020, New Jersey Governor Phil Murphy signed into law three bills that increase the potential pitfalls for businesses that rely on independent contractors. One new law adds to the penalties for misclassifying employees as independent contractors. Another new law imposes liability on businesses ─ including potential liability on individual managers ─ that use staffing companies that misclassify workers. The third new law adopts new posting requirements and anti-retaliation provisions.
If so, you should be on alert about California Assembly Bill 5 (AB5), a bill based on the California Supreme Court’s decision in Dynamex v. Superior Court.* If it becomes law, AB5 will have wide-ranging repercussions for companies that rely on independent contractors in California.
Under a new administrative rule adopted by the Texas Workforce Commission (the TWC), effective as of April 29, 2019, many Texans working in the ever-growing “gig economy”—that sector of the labor market in which workers provide on-demand services, typically connecting with customers using digital platforms hosted by companies such as Uber and Lyft—are likely to be treated as independent contractors rather than employees. The new rule insulates companies that provide such digital platforms from paying unemployment taxes, since the individuals comprising their workforces will not be treated as employees under the Texas Unemployment Compensation Act.