HR & Payroll

Independent Contract Audits by Department of Labor (DOL) and the National Labor Relation Board (NLRB) are Creating Havoc for Employers!

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    Margie Faulk - PHR, SHRM-CP
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    Jul 26, 2023
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    13:00 PM EST
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    90 Min
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Learn How Misclassifications Can be a Legal Nightmare for Employers!


Recent developments at the National Labor Relations Board (NLRB) and the U.S. Department of Labor’s Wage and Hour Division (DOL) could make it more difficult for businesses to classify workers as independent contractors. On January 6, the NLRB and the DOL announced that they entered a Memorandum of Understanding which provides for and encourages interagency cooperation through “information sharing, joint investigations and enforcement activity, training, education, and outreach.” In a separate press release, the NLRB stated that the Memorandum of Understanding “will allow for better enforcement against…misclassification of workers as independent contractors.”


Businesses that use independent contractor work would do well to pay attention to the news out of Washington, D.C., because on Oct. 11, the U.S. Department of Labor (DOL) announced its long-awaited proposed rule on contractor classification. The proposed rule would impose a six-factor “economic reality test,” with all the factors equally weighted. The six-factor test would look broadly at the “totality of the circumstances” to determine whether a worker is an independent contractor or employee under the Fair Labor Standards Act (FLSA).


The current rule prescribes a five-factor test to guide the analysis, two of which were designated as “core factors” carrying more weight: 1) nature and degree of control over the work and 2) the worker’s opportunity for profit or loss. As such, under the “core factor” test, if these two factors point in the same direction – an independent contractor – then it is likely that the worker is properly classified as an independent contractor.


By contrast, the proposed six-factor totality test eschews any predetermined weighting. Rather, it requires that each factor be considered in light of the economic reality of the entire activity at issue. The six factors are:

·       Opportunity for profit or loss depending on managerial skill

·       Investments by the worker and employer

·       Degree of permanence of the work relationship (including exclusivity)

·       Nature and degree of control (i.e., scheduling, supervision, price setting, and ability to work for others)

·       Extent to which the work performed is an integral part of the employer’s business

·       Skill and business-like initiative


Why Should You Attend:


These developments at the DOL and the NLRB could mean trouble for employers that misclassify workers as independent contractors. For example, an NLRB investigation of an unfair labor practice that leads to the conclusion that certain workers have been misclassified as employees could lead to the DOL finding a company is liable for unpaid overtime and minimum wages.


Considering this heightened scrutiny and potential narrower legal standard, it is now more important than ever to evaluate how companies structure an independent contractor relationship. It is particularly important for employers to seek guidance from experienced counsel when developing and implementing policies related to working with independent contractors.


As the DOL, the IRS, the NLRB, and various other federal and state agencies have their own tests for determining independent contractor vs. employee status for various reasons, employers have a keen interest in staying apprised of the developments in this area of employment law.


Session Highlight:

·       Learn why the DOL and NLRB working together on this workplace issue

·       Learn what other regulatory agencies are creating their own version of Independent Contractor rules

·       Learn what are the several rules that Employers need to follow to stay compliant with classification

·       Learn what the “proposed rules” include, and which proposal can make challenges for Employers and agents of employers like professionals involved in              employee relations

·       Learn what the penalties are for violating classification regulations by the DOL, NLRB and IRS

·       Learn what the best practices are when classifying employee’s vs independent contractors

·       Learn how Employers and Professionals can provide their feedback before the regulations are in place

·       Learn how long Employers have to put the new rule in place

·       Learn how Employers can effectively mitigate the proposed regulations

·       Learn how the regulatory agencies have added classification of Exempt/Non-Exempt as part of their classification audits for 2023


Benefits For Attending:


This training will provide you clarity on classification of employees vs independent contractors and how misclassification can trap you in legal nightmares. In addition, each training I offer free customized compliance tools for all attendees. Also get:

·       SHRM Recertification PDU Credits

·       Free customized compliance tools in the form of guides, templates, policies, and toolkits

·       Additional HR Compliance Supplemental Slides

·       Free answer to all questions even after the training ends


Who Should Attend:

·       All Employers

·       Business Owners

·       Federal Contractors

·       Department Heads

·       Company Leadership

·       Compliance professionals

·       Payroll Administrators

·       HR Professionals

·       Managers/Supervisors

·       Employers in all industries

·       Small Business Owners

·       Large Business Owners

·       Anyone interested in being compliant with current regulations


Ask your question directly from our expert during the Q&A session following the live event.


Margie Faulk is a senior level human resources professional with over 15 years of HR management and compliance experience. A current Compliance Advisor for HR Compliance Solutions, LLC, Margie, has worked as an HR Compliance advisor for major corporations and small businesses in the small, large, private, public, Non-profit sectors and international compliance.  Margie has provided small to large businesses with risk management strategies that protect companies and reduces potential workplace fines and penalties from violation of employment regulations. Margie is bilingual (Spanish) fluent and Bi-cultural.

Margie’s area of expertise includes Criminal Background Screening Policies and auditing, I-9 document correction and storage compliance, Immigration compliance, employee handbook development, policy development, sexual harassment investigations/certified training, SOX regulations, payroll compliance, compliance consulting, monitoring US-based federal, state and local regulations, employee relations issues, internal investigations, HR management, compliance consulting, internal/external audits, and performance management.

Margie holds professional human resources certification (PHR) from the HR Certification Institution (HRCI) and SHRM-CP certification from the Society for Human Resources Management. Margie is a member of the Society of Corporate Compliance & Ethics (SCCE).

1.5 SHRM-CP & 1.5 HRCI Credits

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