News

US Secretary of Labor Withdraws Joint Employer, Independent Contractor Informal Guidance

June 7, 2017

In line with AGC’s regulatory recommendations, on June 7, 2017, U.S. Secretary of Labor Alexander Acosta announced the withdrawal of the U.S. Department of Labor’s (DOL) 2015 and 2016 informal guidance on joint employment and independent contractors. Both pieces of guidance together took an expansive interpretation of employment and threatened the traditional relationship between contractors and their partners. AGC and its members were concerned that these interpretations would make compliance more complicated, leading to unnecessary enforcement efforts and increased costs to projects.

In 2015, the DOL’s Wage & Hour Division (WHD) issued an Administrator's Interpretation (AI) memo aimed at addressing the misclassification of employees as independent contractors. The DOL's position was that most workers qualify as employees under the Fair Labor Standards Act (FLSA) and its broad definition of "employ." Then, in 2016, the WHD issued a second AI establishing new standards for determining joint employment under the federal Fair Labor Standards Act (FLSA) and the Migrant and Seasonal Agricultural Worker Protection Act (MSPA). The intent was to hold companies jointly accountable for FLSA and MSPA violations of their subcontractors, staffing agencies, joint venture partners, and the like through use of an “economic realities” analysis.

In its announcement, the DOL advised that, “Removal of the administrator interpretations does not change the legal responsibilities of employers under the Fair Labor Standards Act and the Migrant and Seasonal Agricultural Worker Protection Act, as reflected in the department’s long-standing regulations and case law. The department will continue to fully and fairly enforce all laws within its jurisdiction, including the Fair Labor Standards Act and the Migrant and Seasonal Agricultural Worker Protection Act.”

AGC continues to identify opportunities where AGC and the Department of Labor (DOL) can partner on its mission to keep American workers safe and healthy while stimulating economic growth and creating new high quality jobs.  Specifically, AGC advises that DOL can achieve these goals through regulatory reduction and streamlining, strengthening the symbiotic partnership between DOL and the construction industry and enhancing present regulatory compliance education and collaboration initiatives.

For more information, contact Claiborne Guy at claiborne.guy@agc.org or 703-837-5382.

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