Infrastructure

The U.S. Department of Labor announced a proposed rule clarifying the definition of employee under the Fair Labor Standards Act (FLSA) as it relates to independent contractors. AGC has long called for federal clarification of the independent contractor status and preservation of legitimate independent contractor relationships, such as those that have historically existed in the construction industry.

The Department’s proposed rule would:

While not ideal, enactment of a short-term continuing resolution (CR) will ensure federal agencies remain open and ongoing projects for direct federal contractors (e.g., those with contracts directly with the U.S. Army Corps, Navy, General Services Administration, etc.) remain uninterrupted through December 11. However, federal construction projects that need fiscal year 2021 funds to begin or start a new phase are prohibited from moving forward.

The U.S. Department of Labor announced a proposed rule clarifying the definition of employee under the Fair Labor Standards Act (FLSA) as it relates to independent contractors. AGC has long called for federal clarification of the independent contractor status and preservation of legitimate independent contractor relationships, such as those that have historically existed in the construction industry.

In a move sure to frustrate employers and usher in a wave of confusion, a New York federal court judge just struck down critical portions of the Labor Department’s new joint employer rule that went into effect a few months ago. Concluding that the agency’s rule has “major flaws,” U.S. District Judge Gregory Woods decided yesterday that the rule did not comport with the Fair Labor Standards Act (FLSA). The September 8 ruling tosses out the new standard that had applied to “vertical” employment relationships (when staffing company or subcontractor workers are contracted to work with another entity, for example), while keeping intact the rarer “horizontal” relationships between related entities that employ the same worker – which was not significantly changed by the final rule. Affected employers may have to chart a more difficult course in order to ensure they are not deemed liable in joint employer situations.