The U.S. Department of Labor (“U.S. DOL”) and the  Pennsylvania Department of Labor and Industry recently signed a 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 stated goal of which is to “combat employee misclassification and to ensure that workers get the wages, benefits, and protections to which they are entitled.”  Pennsylvania is the 32nd state to sign a memorandum of understanding with the Department of Labor as part of its misclassification initiative. The others are Alabama, Alaska, Arkansas, California, Colorado, Connecticut, Florida, Hawaii, Idaho, Illinois, Iowa, Kentucky, Louisiana, Maryland, Massachusetts, Minnesota, Missouri, Montana, New Hampshire, New Mexico, New York, Oregon, Rhode Island, South Dakota, Texas, Utah, Vermont, Virginia, Washington, Wisconsin and Wyoming.

The coordinated effort between the U.S. DOL and participating states raises the stakes for companies that utilize independent contractors.  In the past, a company in Pennsylvania 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 agreement, Pennsylvania will now share this information with the U.S. DOL, which may opt to cooperate in the underlying investigation or conduct a separate investigation.  As such, companies in Pennsylvania, like those in the 31 other states that have signed MOUs with the U.S. DOL, should expect that any misclassification inquiry will automatically expand to include both state and federal agencies, thereby increasing the scrutiny on such companies and the risks associated with a misclassification determination.

 

 

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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.