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NFIB Cautions DOL on Proposed Worker Misclassification Initiative

Author: Beth Milito Date: March 27, 2013

DOL’s Wage and Hour Division is proposing to conduct a survey to collect information from employees on whether they are classified as an employee, independent contractor, or some other status. DOL’s survey is the first step in a larger initiative that DOL calls “Right to Know.”

It’s anticipated the DOL intends to issue a “Right to Know” rule that would require employers to disclose to workers how the worker is classified (i.e., exempt employee, non-exempt employee, or independent contractor) and also to disclose how the individual’s pay is computed. DOL has recently posted a “Fact Sheet” on the forthcoming “Right To Know” rule on its web site, at this link. According to the Fact Sheet, “DOL is considering a proposed rule requiring covered employers to notify workers of their rights under the [Fair Labor Standards Act], and to provide information regarding hours worked and wage computation. Any employer that seek to exclude workers from the FLSA’s coverage will be required to perform a classification analysis, disclose that analysis to the workers, and retain that analysis to give to [Wage and Hour Division] enforcement personnel who might request it.”

A new FLSA rule might require employers to provide each employee with a written notice that would include the following:

1.    The position description;
2.    The employment classification;
3.    The basis for the classification determination; and
4.    Notification to the employee of the benefits and protections associated with that classification, such as overtime protections.
 
NFIB opposes the initiative and has repeatedly emphasized how burdensome such a reporting and recordkeeping requirement would be on small businesses.
 
Moreover, an employee can already determine his or her employment classification by reviewing their paystub. NFIB filed comments on the proposed survey that criticized DOL’s survey effort.
 
NFIB encourages business owners and individuals with concerns or questions about DOL’s initiative to contact dan.bosch@nfib.org.

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