What Employers Need to Know About the Department of Labor’s Withdrawal of the Independent Contractor Rule

Marc EngelMarc Engel

On May 5, 2021, the United States Department of Labor (DOL) withdrew the Independent Contractor Rule which had been adopted by the Trump Administration which would have made it easier for employers to categorize individuals as independent contractors as opposed to employees.

Overview

The Fair Labor Standards Act (FLSA) requires all employers to pay non-exempt employees at least the federal minimum wage for every hour worked in a non overtime work week. In an overtime work week, with respect to all hours worked in excess of 40 hours in a work week, covered employers must pay a non exempt employees at least one and a half times the employee’s regular rate.

The Supreme Court has repeatedly emphasized that the test to be applied to determine whether an individual is an employee or independent contractor under the FLSA is one of “economic reality.” Under this test, the technical label of a worker as an employee or an independent contractor does not drive the analysis. Rather, it is the economic realities of the relationship between the worker and the employer that are determinative.

Continue reading the full article at lerchearly.com: https://www.lerchearly.com/news/what-employers-need-to-know-about-the-department-of-labors-withdrawal-of-the-independent-contractor-rule

What Should Employers Do About the COVID-19 Vaccine?

A Webinar featuring Employment Attorneys Marc Engel and Michael Neary

The COVID-19 vaccine raises many questions for employers. Should you mandate it? Should you recommend it? What policies do you need? 

Lerch Early employment attorneys Marc Engel and Michael Neary on February 11 presented a webinar on how employers should handle issues surrounding the COVID-19 vaccine and plan for the day when the vaccine is readily available.

To view the webinar on Zoom, click here. The passcode is #tFhB3O3.

The webinar was hosted by the Greater Bethesda Chamber of Commerce, the Greater Silver Spring Chamber of Commerce, and the Gaithersburg-Germantown Chamber of Commerce.

If you have any follow-up questions or comments, feel free to reach out to Marc at mrengel@lerchearly.com or Michael at mjneary@lerchearly.com.

CDC Updates Definition of “Close Contact” as it Relates to COVID-19

Employers Should Consider Taking Several Steps

Marc EngelMarc Engel

On October 21, 2020, the Centers for Disease Control (CDC) updated its definition of “close contact” for purposes of determining whether employees have been exposed to COVID-19.  The CDC now defines Close Contact as follows:

Someone who was within 6 feet of an infected person for a cumulative total of 15 minutes or more over a 24-hour period* starting from 2 days before illness onset (or, for asymptomatic patients, 2 days prior to test specimen collection) until the time the patient is isolated.

* Individual exposures added together over a 24-hour period (e.g., three 5-minute exposures for a total of 15 minutes). Data are limited, making it difficult to precisely define “close contact;” however, 15 cumulative minutes of exposure at a distance of 6 feet or less can be used as an operational definition for contact investigation. Factors to consider when defining close contact include proximity (closer distance likely increases exposure risk), the duration of exposure (longer exposure time likely increases exposure risk), whether the infected individual has symptoms (the period around onset of symptoms is associated with the highest levels of viral shedding), if the infected person was likely to generate respiratory aerosols (e.g., was coughing, singing, shouting), and other environmental factors (crowding, adequacy of ventilation, whether exposure was indoors or outdoors). Because the general public has not received training on proper selection and use of respiratory PPE, such as an N95, the determination of close contact should generally be made irrespective of whether the contact was wearing respiratory PPE.  At this time, differential determination of close contact for those using fabric face coverings is not recommended.

The decision by the CDC to update the definition of “close contact” is likely to, among other things, make contact tracing even more challenging for employers.

To learn about steps employers should consider taking, read the rest of the article on our website: https://www.lerchearly.com/news/cdc-updates-definition-of-close-contact-as-it-relates-to-covid-19.

For more information, contact Marc at 301-657-0184 or mrengel@lerchearly.com.

On the Hook: Business Owners could be Personally Liable for Employees’ Unpaid Wages

Michael NearyMichael Neary

Employee wages must be the number one debt obligation your business pays on time, no matter the financial burdens your business faces. If your business cannot pay wages, rightsize your workforce immediately – or else you personally could be on the hook for the wages.

A recent Maryland Court of Special Appeals case demonstrates yet again why that is the case. While most business entities limit the possibility of personal liability, the Fair Labor Standards Act, the Maryland Wage and Hour Law, and the Maryland Wage Payment and Collection Act allow for personal liability. In Lin v. Cruz, the Maryland intermediate appellate court again found all three of these wage laws can hold individuals liable for the wages owed by a business under the economic realities test.

The Economic Realities Test

In Lin, a group of employees sued a restaurant and six individuals seeking to recover unpaid wages. The trial court found one individual liable for close to $400,000 in wages and enhanced damages. On appeal, the Lin court affirmed the trial court by applying the economic realities test.

The economic realities test asks whether the individual the plaintiff seeks to hold liable “(1) had the power to hire and fire the employees, (2) supervised and controlled employee work schedules or conditions of employment, (3) determined the rate and method of payment, and (4) maintained employment records.” The economic realities standard can easily extend individual liability past the owners of a business depending on the level of authority the individual had over the employee seeking wages. The ability of plaintiffs’ attorneys to stretch wage statutes to attach liability outside the core ownership group is bolstered by the view expressed in Lin that wage laws should be given an “expansive interpretation” to achieve the “broad remedial purposes” of those laws.

Because of cases like Lin, employees seeking to recover unpaid wages increasingly name individuals as defendants. Plaintiffs filing wage lawsuits can recover the unpaid wage, enhanced damages (up to four times the wage owed in one local jurisdiction), and attorneys’ fees. The enhanced damages increases the exposure for any individual named in a wage lawsuit. Since the economic realities test is fact specific, most individuals named as defendants will find it difficult having the claims dismissed on a motion to dismiss. Accordingly, the individuals could be stuck in the lawsuit through discovery and ultimately, depending on the facts, could be held liable for the damages awarded.

Prioritize Wages No Matter What

Because of the high stakes to the company and individuals in the management group from wage lawsuits, businesses should ensure employees are timely and properly paid for all hours worked no matter how tight the company finances become.

For more information, contact Michael at 301-657-0740 or mjneary@lerchearly.com.