Earlier this month, the U.S. Department of Labor unveiled its Unified Agenda of Regulatory and Deregulatory Actions, which “provides the American people with a transparent look at regulations being considered by the Administration and ensures the public is engaged throughout the process.” This regulatory agenda, which is similar to a to-do list for the department, can be found here.
Twice a year, federal agencies are required by law to let businesses, workers, and the public know about which rules are being written or changed, when that might happen, how people can give input (usually through public comment periods), and why it matters. This semiannual agenda lists two items of interest for the staffing industry and their clients: joint employer status under the Fair Labor Standards Act and employee or independent contractor classification under the FLSA.
As many staffing firms know, the rules and regulations around joint employer status seem to go back and forth depending on what political party is occupying the White House. Most recently, a joint employer rule issued in 2020 which made it harder for a company to be considered a joint employer was rescinded in July 2021. According to the agenda, DOL is “considering a notice of proposed rulemaking to adopt regulations that would guide the Wage and Hour Division’s enforcement of joint employer liability.”
While joint employment is nothing new in traditional staffing arrangements, it can be confusing for clients. A clean, well-written rule that can be easily explained to clients would certainly be helpful for staffing firms. ASA members should utilize the ASA Joint Employer Tool Kit and feel free to share the material with their clients.
When it comes to independent contractors, the agenda notes that the current independent contactor rule is the subject of several ongoing legal challenges. According to the agenda, “the Department intends to rescind the 2024 Independent Contractor rule and is considering how it will proceed with examining the circumstances under which a worker should be classified as an employee or independent contractor for the purpose of federal wage and hour requirements.”
If workers are misclassified as independent contractors, they and the clients that use them are at risk of penalties for noncompliance with the laws covering employees—and traditional staffing agencies that comply with those laws are at a competitive disadvantage because of their higher payroll and benefit costs compared to the platforms. Clarity in the federal law regarding the classification of employees would go a long way in helping workers, staffing firms, and their clients. ASA is committed to working with regulators to achieve that end.
It is important to remember that these agendas do not change the law right away. Items listed on the agenda may be considered and discussed, and some may not be worked on at all. The important thing is the agenda gives interested parties an idea about what might be coming.
ASA will continue to monitor DOL’s work on these and all issues that impact the industry and will engage when appropriate. Staffing firms who would like to submit their own comment letters on proposed rules should feel free to do so. To ensure a consistent industry message, please contact the ASA legal department with any questions you may have about the process.