Federal Law Alert: Misclassifying Workers as Independent Contractors Does Not Violate NLRA
On August 29, 2019, the National Labor Relations Board (NLRB) released its holding in Velox Express, Inc., 15-CA-184006, 368 NLRB No. 61, where it found that employers do not violate the National Labor Relations Act (NLRA) solely by misclassifying employees as independent contractors. The NLRB majority held that an employer’s communication to its workers of its opinion that they are independent contractors does not, standing alone, violate the NLRA if that opinion turns out to be mistaken. According to the decision, such communication does not inherently threaten those employees with termination or other adverse action if they engage in activities protected by the NLRA, nor does it communicate that it would be futile for them to engage in such activities.
In Velox Express, the NLRB applied its recent decision in SuperShuttle DFW, Inc., 367 NLRB No. 75 (2019), to find that the workers were employees and not independent contractors, and thus protected by the NLRA. Based on that determination, it held that the employer violated the NLRA when it discharged one of these employees for bringing to management’s attention group complaints about the way the employer was treating its workers. However, the NLRB majority held that the employer’s misclassification of its employees as independent contractors was not a separate violation.
Proposed Rules Regarding FLSA
On August 12 and August 15, 2019, the U.S. Department of Labor, Wage and Hour Division (WHD) submitted the following Notices of Proposed Rulemaking (NPRM) related to the Fair Labor Standards Act (FLSA):
RIN 1235-AA20: Under this NPRM, the WHD is seeking to determine the appropriate salary level for exemption of executive, administrative, and professional employees.
RIN 1235—AA31: Under this NPRM, the WHD is proposing to revise 29 C.F.R. § 778.114, which provides an alternative method for calculating overtime pay under the FLSA for employees whose work hours fluctuate from week to week. However, this method is not available to employers who compensate their employees with bonuses or other incentive-based pay. The WHD proposes to revise these regulations to grant employers flexibility to provide additional forms of compensation to employees whose hours vary from week to week.
Both NPRMs are pending review.
NLRB Decides First Mandatory Arbitration Case Following Supreme Court’s Epic Systems Ruling
On August 14, 2019, the National Labor Relations Board released its decision in Cordua Restaurants Inc., 368 NLRB No. 43 (2019) addressing mandatory arbitration agreements, as follows:
Employers are not prohibited under the National Labor Relations Act (NLRA) from informing employees that failing or refusing to sign a mandatory arbitration agreement will result in their discharge.
Employers are not prohibited under the NLRA from promulgating mandatory arbitration agreements in response to employees opting in to a collective action under the Fair Labor Standards Act or state wage-and-hour laws.
Employers are prohibited from taking adverse action against employees for engaging in concerted activity by filing a class or collective action, consistent with the Board’s long-standing precedent.
This decision was the first to address the lawfulness of employer conduct surrounding mandatory arbitration agreements since the Supreme Court’s Epic Systems ruling issued in 2018. In Epic Systems v. Lewis, the Court held that class- and collective-action waivers in mandatory arbitration agreements do not violate the NLRA.
Read the decision
NLRB Proposes Rulemaking
On August 9, 2019, the National Labor Relations Board (NLRB) announced that it is publishing a Notice of Proposed Rulemaking (NPRM) on August 12, 2019, in the Federal Register proposing amendments to Part 103 of its Rules and Regulations. According to the NLRB, the proposed amendments are intended to protect employees’ statutory right of free choice on questions concerning representation.
As detailed in the NPRM, the Board majority is proposing the following amendments:
Blocking Charge Policy: The NPRM proposes replacing the current blocking charge policy with a vote-and-impound procedure. Elections would no longer be blocked by pending unfair labor practice charges, but the ballots would be impounded until the charges are resolved.
Voluntary Recognition Bar: The NPRM proposes returning to the rule of Dana Corp., 351 NLRB 434 (2007). For voluntary recognition under Section 9(a) of the Act to bar a subsequent representation petition, and for a post-recognition collective-bargaining agreement to have contract-bar effect, unit employees must receive notice that voluntary recognition has been granted and a 45-day open period within which to file an election petition.
Section 9(a) Recognition in the Construction Industry: The NPRM proposes that in the construction industry, where bargaining relationships established under Section 8(f) cannot bar petitions for a Board election, proof of a Section 9(a) relationship will require positive evidence of majority employee support and cannot be based on contract language alone, overruling Staunton Fuel, 335 NLRB 717 (2001).
Read the announcement
DOL Releases New Opinion Letters Addressing FLSA and FMLA Compliance
On August 8, 2019, the U.S. Department of Labor (DOL) issued the following new opinion letters addressing compliance under the federal Fair Labor Standards Act (FLSA) and the federal Family and Medical Leave Act (FMLA):
FMLA2019-2-A: Addressing whether attending a Committee on Special Education meeting to discuss a child’s Individualized Education Program qualifies as FMLA leave;
FLSA2019-11: Addressing the application of the section 7(k) overtime exemption to public agency employees engaged in both fire protection and law enforcement activities; and
FLSA2019-12: Addressing the employment status of volunteer reserve deputies who perform paid extra duty work for third parties.
An opinion letter is an official, written opinion by the DOL’s Wage and Hour Division analyzing how a law applies under specific circumstances presented by the individual or entity that requested the letter.
See the announcement
Proposed Revisions to FMLA Forms
On August 5, 2019, the U.S. Department of Labor’s Wage and Hour Division (WHD) published a notice announcing a 60-day public comment period on proposed revisions to the following optional-use Family and Medical Leave Act (FMLA) forms:
WH-380-E, Certification of Health Care Provider for Employee’s Serious Health Condition.
WH-380-F, Certification of Health Care Provider for Family Member’s Serious Health Condition.
WH-381, Notice of Eligibility of Rights & Responsibilities.
WH-382, Designation Notice.
WH-384, Certification of Qualifying Exigency for Military Family Leave.
WH-385, Certification for Serious Injury or Illness of Covered Servicemember—for Military Family Leave.
WH-385-V, Certification for Serious Injury or Illness of a Veteran for Military Caregiver Leave.
The WHD publishes these seven forms, which the public may use free of charge in administering the FMLA. According to the WHD, the revisions propose:
Fewer questions requiring written responses that were replaced by statements that can be verified by simply checking a box.
Reorganization of medical certification forms to more quickly determine if a medical condition is a serious health condition as defined by the FMLA.
Clarifications to reduce the demand on health care providers for follow-up information.
More information on the notification forms to better communicate specific information about leave conditions to employees.
Changes to the qualifying exigency certification form to provide clarity to employees about what information is required.
Changes to the military caregiver leave forms to improve consistency and ease of use.
Layout and style changes to reduce blank space and improve readability
Read the notice
EEOC Releases Component 2 Compensation Data FAQs
In August 2019, the U.S. Equal Employment Opportunity Commission (EEOC) released frequently asked questions regarding the collection of EEO-1 2017 and 2018 Component 2 Compensation Data. The FAQs cover:
Deadline for filing (September 30, 2019);
Reporting nonbinary gender employees; and
Summary compensation data.
Read the FAQs
On June 5, 2019, the U.S. Citizenship and Immigration Service (USCIS) published a Federal Register notice to invite public comments on its proposed extension of Form I-9 before it expires on August 31, 2019 (edition date 07/17/17). The federal Paperwork Reduction Act requires a 60-day and a 30-day comment period for this Form I-9 extension. The second comment period was open for 30 days, until July 5, 2019. According to the USCIS, a new edition of the form will be published soon, and employers may continue to use the current form continues (edition date of 07/17/17) until further information is released. Of note, the edition date is located at the bottom of the page on the form and instructions.