Yesterday the U.S. Department of Labor (“U.S. DOL”) and the Vermont Department of Labor (“VDOL”) signed a three-year memorandum of understanding to share information and conduct joint investigations regarding independent contractor misclassification.  The agreement is part of the U.S. DOL’s Misclassification Initiative, the goal of which is to prevent, detect, and remedy employee misclassification.  Just last month Alaska’s Department of Labor and Workforce Development entered into a similar agreement.   Vermont is the 26th state to sign a memorandum of understanding with the Department of Labor as part of its misclassification initiative. The other states signing the memorandum are Alaska, Alabama, California, Colorado, Connecticut, Florida, Hawaii, Idaho, Illinois, Iowa, Kentucky, Louisiana, Maryland, Massachusetts, Minnesota, Missouri, Montana, New Hampshire, New York, Rhode Island, Texas, Utah, Washington, Wisconsin and Wyoming.

This agreement between Vermont and the U.S. DOL comes on the heels of an August 31, 2015 report issued by Vermont State Auditor Doug Hoffer entitled “Worker Misclassification – Action Needed to Better Detect and Prevent Worker Misclassification.”

Employers in Vermont should expect the misclassification audit report and the memorandum of understanding with the U.S.DOL to spur investigation activity within the state.  Companies in Vermont, like those in the 25 other states that have signed memoranda with the U.S. DOL, should expect that any misclassification inquiry will now automatically expand to include both state and federal agencies, thereby increasing the scrutiny on such companies and the risks associated with a misclassification determination. Employers who have not already closely reviewed their independent contractor relationships should consider performing a privileged audit in order to assess the risk they may have of misclassification claims.

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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.