DOL Opinion Letter Offers Gig Employer Free Pass to Misclassify Workers

Following is a statement from Rebecca Smith, director of the work structures program at the National Employment Law Project, in response to the U.S. Labor Department’s issuance today of an opinion letter stating that workers who provide services for a particular unnamed “virtual marketplace company” are independent contractors:

“In the latest move by gig companies to underpay and mistreat their workers, an unnamed company has requested and received an opinion letter from the U.S. Labor Department’s Wage and Hour Division stating that its workers are independent contractors and not employees under the Fair Labor Standards Act.

“This DOL opinion letter is a cynical interpretation of employment law. But it is hardly a surprise coming from the Trump administration, which has shamefully sided with big-money corporate interests over working people at every turn.

“Whatever gig company sought the opinion will likely use the letter as a free pass to argue that it acted in good faith in classifying its workers as contractors—even when its actions fail to satisfy the traditional legal test for determining employment status.

“The effort to secure a DOL opinion letter may be just one more piece of a coordinated industry campaign to strip gig workers of minimum wage and other employee protections. A recent NELP report detailed how Uber, Handy, and other tech companies that are also service providers have joined powerful corporate allies and lobbyists to radically rewrite federal and state employment laws around the country—with the goal of locking gig workers into independent contractor status, stripping them of the basic labor rights and protections, and allowing the companies to evade payroll taxes and worker lawsuits.

“Opinion letters are not dispositive, nor do they set precedent. As DOL states, ‘[a]n opinion letter is an official, written opinion by WHD on how a particular law applies in specific circumstances presented by the person or entity requesting the letter.’

“The DOL ignored some key facts in this case, despite only using information provided by the company. Here, the company assigns workers to jobs, sets their pay, and disciplines them when they fail to meet the company’s rigorous performance standards. Under those facts, how can the workers be in business for themselves? The DOL skipped over the true indicia of what it means to run one’s own business.”

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The National Employment Law Project is a non-partisan, not-for-profit organization that conducts research and advocates on issues affecting low-wage and unemployed workers. For more about NELP, visit www.nelp.org. Follow NELP on Twitter at @NelpNews.