The U.S. Department of Labor (“U.S. DOL”) and the New Hampshire Department of Labor recently signed a memorandum of understanding to share information regarding independent contractor misclassification.  The agreement is part of the U.S. DOL’s Misclassification Initiative, with the goal of preventing, detecting, and remedying employee misclassification.  Just last month Alabama’s Department of Labor entered into a similar agreement.  California, Colorado, Connecticut, Hawaii, Illinois, Iowa, Louisiana, Maryland, Massachusetts, Minnesota, Missouri, Montana, New York, Utah and Washington state agencies have also signed such memoranda.

The coordinated effort between the U.S. DOL and participating states raises the stakes for companies who utilize independent contractors.  In the past, a company might pay a single fine to a state agency for not making proper unemployment insurance payments due to misclassification of its workers.  Under the new agreements, a participating state will now share this information with the U.S. DOL, which may opt to seek additional penalties and fines for federal wage violations.  Thus, companies found to have misclassified their workers could find themselves the subject of multiple attacks.

This continued focus on misclassification comes as no surprise, especially in light of Solicitor of Labor M. Patricia Smith’s comments earlier this month at the ABA Labor and Employment Law Conference.  There she stated that the U.S. DOL intends to continue working closely with state agencies, as well as the IRS, to address independent contractor misclassification, making it a top priority for the Department.  All this makes clear that businesses that utilize independent contractors should be prepared for continued regulatory scrutiny.

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Photo of Guy Brenner Guy Brenner

Guy Brenner is a partner in the Labor & Employment Law Department and leads the Firm’s Washington, D.C. Labor & Employment practice. He is head of the Government Contractor Compliance Group, co-head of the Counseling, Training & Pay Equity Group and a member…

Guy Brenner is a partner in the Labor & Employment Law Department and leads the Firm’s Washington, D.C. Labor & Employment practice. He is head of the Government Contractor Compliance Group, co-head of the Counseling, Training & Pay Equity Group and a member of the Restrictive Covenants, Trade Secrets & Unfair Competition Group. He has extensive experience representing employers in both single-plaintiff and class action matters, as well as in arbitration proceedings. He also regularly assists federal government contractors with the many special employment-related compliance challenges they face.

Guy represents employers in all aspects of employment and labor litigation and counseling, with an emphasis on non-compete and trade secrets issues, medical and disability leave matters, employee/independent contractor classification issues, and the investigation and litigation of whistleblower claims. He assists employers in negotiating and drafting executive agreements and employee mobility agreements, including non-competition, non-solicit and non-disclosure agreements, and also conducts and supervises internal investigations. He also regularly advises clients on pay equity matters, including privileged pay equity analyses.

Guy advises federal government contractors and subcontractors all aspects of Office of Federal Contract Compliance Programs (OFCCP) regulations and requirements, including preparing affirmative action plans, responding to desk audits, and managing on-site audits.

Guy is a former clerk to Judge Colleen Kollar-Kotelly of the US District Court of the District of Columbia.