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Contractors Are Under Attack

Reviving efforts begun during the Obama era, the Biden administration is once again launching full-scale attacks on the legal status of independent contractors, including truck owner-operators.

In early January, the Department of Labor and National Labor Relations Board signed a memorandum of understanding (MOU) to share information, collaborate and coordinate on investigations of alleged violations of labor and employment laws regarding potential worker misclassification, including independent contractor status and joint-employment relationships.

How the independent contractor and joint employer definitions are written and interpreted will have profound consequences for the economy, employers, and the individuals who will be directly impacted. A radical contractor law adopted in California at the behest of unions has shown this to be the case.

States like New Jersey and Massachusetts adopted similar laws, and a clause that would make it federal law is contained in a Democrat-sponsored labor reform bill that is stalled in Congress.

David Weil, a former Obama DOL official who notoriously proclaimed that there are no such things as independent contractors, just misclassified employees, has been re-nominated to his former post by Biden. If he is confirmed, it is believed he will try to institute the California ABC standard administratively if the labor reform bill dies.

DOL and the NLRB already have moved to undermine Trump era actions dealing with these issues, including dropping rules dealing with joint employer status. The goal is to make franchisers like McDonald’s franchise employees open to organizing by unions, which currently can’t do so.

“Companies that use independent contractors or alternative workplace arrangements may want to consider monitoring these developments and auditing their own worker classifications to minimize the ever-growing risks in this area, to the extent possible,” say attorneys William Collins and Maggie Santen of the Ogletree Deakins law firm.

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