On December 5, Nancy J. Leppink, Deputy Administrator of the U.S. Department of Labor’s Wage and Hour Division, and Ellen Golombek, Executive Director of the Colorado Department of Labor and Employment, signed a memorandum of understanding regarding misclassification of employees as independent contractors.
According to the news release, the memorandum is designed to guide the agencies in their efforts to “protect the rights of employees and level the playing field for responsible employers” by eliminating the advantages enjoyed by employers who misclassify their employees. The memorandum outlines how Colorado and the federal government will share information and coordinate enforcement efforts. A total of 11 states have entered into memoranda of understanding with the U.S. Department of Labor.
In light of this new agreement, there has never been a better time for employers to audit their employment practices to ensure compliance with applicable wage and hour laws. Areas to consider include:
Reviewing the duties of your independent contractors to ensure they satisfy all federal and state definitions. While there is generally a great deal of overlap, the definitions for “independent contractor” can vary somewhat among agencies.
Ensuring all positions classified as “exempt” meet both the duties and salary basis tests.
Paying non-exempt employees for all time worked. Common areas of concern include interns, travel time, meal and break periods, training time, and unauthorized work.
At a recent Bureau of Labor Relations symposium, attorney Kara Shea said that 73 percent of wage and hour investigations result in findings of violations. Don’t let your company become a statistic. MSEC has resources to assist with all of these issues. For more information, call Employment Law Services.