Feds Go Backwards, California Moves Forward

In its latest attack on working people, the Trump  Department of Labor has adopted a definition of  “employee” so weak and vague that a judge may decide whether a worker is an  “employee” or “contractor” based solely on the political and policy views of the judge.  The DOL’s  April 29, 2019 Opinion Letter adopts a seven factor test:

  1. The employer”s control of the work;
  2. The permanency of the job;
  3. The amount of the worker’s capital investment;
  4. The worker’s skill  and independent judgement used;
  5. The worker’s opportunities for profit and loss;
  6. The Integration of the worker’s services into the employer’s business; and
  7. Other facts that may be relevant.

Worse yet, the Trump DOL has adopted this new standard in an opinion letter.  Unlike a court decision, official regulations, or legislation, an Opinion Letter is done in secret.  An employer simply writes a letter to the DOL and the DOL answers it if it so chooses.  Here, the unconfirmed Acting Secretary of the Department of Labor apparently wanted to give employers a tool to try to take “employee” status away from millions of American workers.  Being classified as an employee rather than a contractor is vitally important because contractors do not have the right to organize, minimum wage, overtime, workers compensation, FMLA leave, workplace health and safety laws, and more.
Almost directly opposite to this, nearly a year to the day prior to this  attack on working people, the California Supreme Court confirmed the definition for an “ independent  contractor” called the ABC test:

  1. The worker must be free from the control and direction of the employer  in connection with performance of the work;
  2. The worker must perform work that is outside the usual course of the hiring entities’ business; and
  3. The worker must be customarily engaged in an independently established trade occupation or business of the same nature the worker is performing for the hiring entity. 

Take for example, Uber, or Lyft, or any other delivery company.  Under the Trump rule, the company could lease the trucks to the drivers, pay them solely on a commission basis or force them to purchase the product from the company and a court might consider those workers independent contractors under the Federal rule.  However, under the California ABC test, the drivers would be employees because the employer controls the product, the worker is doing work within the company’s usual course of business, and the worker is not engaged in an independently established trade if the worker is  a delivery driver. On the other hand, if one of these delivery companies hired a gardener to do the landscaping at headquarters, the gardener would probably be an independent contractor since gardening is not the delivery company’s ordinary course of business.
The reason the Trumpistas are trying to get away with this is that the definition of employee in the Fair Labor Standards Act states: “… the term ‘employee’ means any individual employed by an employer.”  But the House of Representatives is currently working on enacting  HR 582, the Raise the Wage Act.  If the House added a section to HR 582 amending Section 3(e)(1) to include the ABC test this would solve this problem if and when such a law is adopted by the House and the Senate and signed by a new President.

By Matt Gauger & Gary Provencher | May 16, 2019

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