First Labor Policy Shift Under Trump Is Underway

by Joseph C. Maya on Jun. 21, 2017

Employment Labor Law Employment  Employment Contracts 

Summary: A blog post about changes being made under President Trump on the Fair Labor Standards Act.

Contact the experienced employment law attorneys at Maya Murphy, P.C. today at (203) 221-3100 or JMaya@Mayalaw.com

Last week, the U.S. Labor Department announced its first major shift in labor policy under the Trump administration, which had been widely anticipated since President Trump, a Republican and wealthy businessman, took office. The agency is rescinding the Obama-era’s interpretation of the Fair Labor Standards Act, which expanded the circumstances under which a business could be liable for wage-law violations committed by contractors, staffing agencies, and franchisees. Under the Obama administration’s standard, companies were treated as “joint employers” if they hired and fired workers and set wages. A worker’s level of “economic dependence” on the company was also a relevant factor. The Department claims that the former, expanded standard threatened the franchise business model and resulted in lawsuits against companies who were not responsible for setting work conditions

The Labor Department also withdrew guidance from the Obama era regarding independent contractors, which said that many workers are wrongly treated as independent contractors when they are actually employees. This former guidance regarding interpretation of the FLSA made many independent contractors eligible to receive minimum wage, overtime, and other legal protections. Although “guidance” does not equate to a legally binding rule, it does affect how agencies enforce federal laws.

Business groups are, not surprisingly, pleased with the labor department’s decision. A vice president at the U.S. Chamber of Commerce, Randy Johnson, stated, “Diligent employers work hard to be compliant with the FLSA and these [department] interpretations were merely enforcement traps waiting to spring.” Meanwhile, unions and workers’ rights groups are not quite as pleased. Lynn Rhinehart, General counsel for the American Federation of Labor and Congress of Industrial Organizations, the largest federation of unions in the United States, said, “This was guidance that made it easier for employers, workers, unions and others to know about their rights and obligations under the law.”

However, the labor department’s decision does not affect the National Labor Relations Board’s expansion of the “joint employment” definition, which is currently under review by a federal appeals court. The NLRB’s standard, as opposed to the department’s guidance of the FLSA, is legally binding, mandating that joint employers to bargain with unions.

If you have concerns about your rights as an employer or an employee, contact the experienced employment law attorneys today at 203-221-3100, or by email at JMaya@mayalaw.com. We have the experience and knowledge your child needs at this critical juncture. We serve clients in both New York and Connecticut including New Canaan, Bridgeport, White Plains, and Darien.

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