In a recent opinion, the National Labor Relations Board (“NLRB” or “Board”) held that a high-level executive’s tweet violated Section 8(a)(1) of the National Labor Relations Act (“NLRA”) by interfering with and/or restraining employee rights to engage in concerted activity. The tweet, which was sent by an executive at TheFederalist.com, stemmed from a walkout at vox.com, one of the company’s competitors. On the day of the walkout, the executive tweeted, “FYI @fdrlst first one of you tries to unionize I swear I’ll send you back to the salt mine.” An individual who does not work for the company saw the tweet and reported it to the NLRB. Continue reading
written by Marianna Michael
On November 20, 2020, the Supreme Court of Kentucky issued two new Administrative Orders regarding hearings. Orders 2020-71 and 2020-72 replace Administrative Orders 2020-63 and 2020-64 which were published in early November as guidance to courts in “red zone” counties. With nearly each of Kentucky’s 120 counties at or near “red zone” status, the Court is again mandating many of the restrictions imposed earlier this summer.
Written by: Marianna Michael
Overruling a lower court, the Supreme Court of Kentucky unanimously upheld Governor Andy Beshear’s authority to issue executive orders in an emergency on November 12, 2020. Attorney General Daniel Cameron had joined three Northern Kentucky business owners in contesting executive orders issued by Governor Beshear in response to the COVID-19 pandemic. The plaintiffs argued that the restrictions exceeded Governor Beshear’s constitutional powers. Continue reading
Written by: Sean Williamson
On September 22, 2020, the Department of Labor (“DOL”) issued a proposed rule that attempts to clarify the distinction between employees covered by the Fair Labor Standards Act (“FLSA”) and independent contractors. The FLSA requires covered employers to pay nonexempt employees at least the federal minimum wage for every hour worked and overtime pay for every hour worked over forty (40) in a work week, and it also mandates that employers keep certain records regarding their employees. A worker who performs services for an individual or entity as an independent contractor, however, does not fall within the FLSA’s requirements applicable to employees.
The FLSA does not define “independent contractor,” but the DOL and the courts have long interpreted the distinction between an employee and independent contractor to require evaluation of the worker’s economic dependence on the putative employer. The ultimate inquiry is whether—as a matter of economic reality—the worker is dependent on a particular individual, business, or organization for work (and thus is an employee) or is in business for himself or herself (and thus is an independent contractor). While this “economic reality” test has existed for some time, the DOL’s proposed rule emphasizes that the underpinnings and application of the test have lacked focus, creating uncertainty in the regulated community.
The DOL’s proposed rule attempts a “clear articulation” of the test by sharpening the inquiry into five distinct factors. Two “core” factors—(1) the nature and degree of the worker’s control over the work and (2) the worker’s opportunity for profit or loss—would be afforded greater weight than any others in the analysis of economic dependence or lack thereof. The three remaining, but less probative, factors to be considered under the proposed rule are (3) the amount of skill required for the work, (4) the degree of permanence of the working relationship, and (5) whether the work is part of an integrated unit of production. If the first and second “core” factors both weigh in favor of finding either an employee or independent contractor relationship, the analysis is likely complete and will not be affected by the remaining three subsidiary factors, which serve as tie-breakers.
This dual factor analysis, with tie-breaking factors, substantially departs from the multi-factor, “totality of the circumstances” tests applied in various federal courts. It also shifts the focus of the analysis away from the potential employer’s control over the worker, instead focusing on the worker’s control over his or her work, such as decisions of when to work and for how long. The DOL’s proposed rule would provide businesses with much needed clarity in classifying their workers, and a more favorable standard for those businesses wishing to treat workers as independent contractors.
Businesses, however, should be cautious in relying on the DOL’s proposal should it ultimately be adopted as a final rule. The country is in the midst of a hotly contested election cycle. There is no guarantee that a new presidential administration or Congress would not eliminate the regulation. Even if the proposed rule survives the pitfalls of electoral politics, it will very likely be challenged in the courts which might decide that the DOL’s interpretation of the FLSA is not entitled to judicial deference. Finally, the DOL’s proposed rule does nothing to obviate the obligations of businesses to comply with more restrictive state laws.
by Daniel Reed
The Department of Labor (“DOL”) recently provided clarity on issues related to remote work and remote learning.
Reasonable Diligence in Tracking Remote Work Employee Hours
The DOL issued guidance on employers’ obligation to track the work hours of employees who are working remotely due to COVID-19 or due to an already existing telework or remote work agreement.Continue reading
Written by: Marianna Michael
On July 27, 2020, the Supreme Court of Kentucky entered two new orders to provide continuing guidance on the functions of courts during COVID-19.
Written by: Marianna Michael
In three recent letters, the Department of Labor (“DOL”) offered guidance on the outside sales exemption and the retail or service establishment exemption.
An employer qualifies for the outside sales exemption if its employee’s: (i) primary duty is to make sales (as defined in the Fair Labor Standards Act “FLSA”) or obtain orders or contracts for services or making the use of facilities for which a consideration will be paid by the client or customer and (ii) are customarily and regularly engaged away from the employer’s place or places of business.
The retail or service establishment exemption applies if: (i) the employee is employed by a retail or service establishment; (ii) the employee’s regular rate of pay exceeds one and one-half times the minimum hourly rate; and (iii) more than half of the employee’s compensation for a representative period (not less than one month) consists of commissions on goods or services. Continue reading