At the same time that the Department of Labor’s Wage and Hour Division (WHD) is stepping up the heat on employers who misclassify workers as independent contractors, (See “Worker Misclassification Under Fire from Federal and State Agencies“), it has pulled back on its longstanding practice of offering guidance to employers seeking clarification on specific wage and hour issues.
In March, the WHD announced it would no longer issue opinion letters offering fact-specific guidance on issues under the Fair Labor Standards Act. In the past, both employers and unions have sought and received guidance on wage and hour questions, although the process was slow.
“They want to step up enforcement, they want to increase the penalties substantially–they want a lot of heat on employers,” says John Thompson, a partner at Fisher & Phillips. “But they say, ‘If you ask us to write an interpretation of the law on specific facts, we are not likely to do it.’”
Thompson says obtaining an opinion letter has been a frustrating experience going back long before the current administration.
“I’ve had an opinion request sitting there since 2003,” he says. “Every time I call they say it is in process, but it’s going on seven years now.”
The lack of clear guidelines for when a worker can be classified as an independent contractor is one example of an area where employers need fact-specific guidance, he adds.
“We have employers that say they want to do what they are supposed to do, they just don’t know what that is,” he says. “We’ve tried to ask [WHD] and they haven’t answered, and now it looks like they won’t.”
In announcing that it will change its approach to employer guidance, the WHD said it would issue “administrator’s interpretations,” general guidance on wage and hour issues that would apply to a broader range of employers than the fact-specific opinion letters. It said the interpretations would be issued only when they relate to “an entire industry, category of employees or all employees.” According to the DOL, this will be a more efficient use of its resources.
The announcement on opinion letters came as the WHD also was launching an enhanced enforcement effort on wage and hour violators, including an initiative aimed as misclassification of independent contractors.
“I don’t agree that’s a good way to do it,” Thompson says. “I think their view of employers’ desire to comply is unnecessarily cynical. Employers don’t want this trouble. By far, most employers just want to do their business. And [WHD] overestimates how simple the law is, because it looks like it’s simple and it’s not.”
Thompson adds that by not issuing opinion letters, the WHD avoids being pinned down on interpretation of a matter that may end up in litigation.
“It’s a lawsuit, lawyer driven agency to some extent,” he says. “And they don’t want to be pinned down in litigation to certain positions. I suspect their lawyers say, ‘You might be better off not answering that question.’”