Trump DOL Offers Guidance on Independent Contractor Status

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Although specifically addressing the caregiver registry industry, the Department of Labor’s Field Assistance Bulletin “Determining Whether Nurse or Caregiver Registries Are Employers of the Caregiver” offers general insight into the Trump DOL’s approach to independent contractor status,

This Bulletin follows the DOL’s withdrawal last summer of a 2015 DOL Administrator’s Interpretation on the topic that had been issued under the Obama administration and that expansively asserted “most workers are employees under the FLSA’s broad definitions.” The DOL now retreats to a historical “economic reality” approach, in which it reviews the “totality of the circumstances to evaluate whether an employment relationship exists.”

In determining whether a caregiver registry (which acts as a “matchmaker” between clients and caregivers) is the employer of the caregiver, or whether the caregiver is an independent contractor, the DOL has set forth a non-exhaustive list of factors. This list, however, offers general guidance to all employers on what are some of the factors that should be considered in the assessment of independent contractor status, as follows:

  • Conducting Background and Reference Checks. The performance of basic or legally required background checks does not suggest employer status. The evaluation of other subjective criteria, however, implies the pre-selection of caregivers, which argues in favor of employer status.
  • Hiring and Firing. If the client actually hires or fires the caregiver, without input from the registry as to the terms and conditions of the caregiver’s employment, this indicates that the registry is not the employer. If the registry exercises control over these functions, at the request of a client, for example, then this suggests employer status.
  • Scheduling and Assigning Work. Similarly, if the client determines the work schedule and assignments for the caregiver, this indicates the registry is not the employer. On the other hand, if the registry assigns specific caregivers to a client based on its discretion and judgment, this control over the caregiver indicates employer status.
  • Controlling the (Caregiver’s) Work. If the registry instructs caregivers on how to provide services, or monitors their work, this suggests employer status. Registries could also exercise control indicative of employment by limiting the number of clients or hours served by the caregiver, prohibiting the caregiver from registering with other registries, or prohibiting the caregiver from working directly with clients outside the registry.
  • Setting the Pay Rate. If the registry is not determining the rate of pay, this indicates the lack of an employment relationship. The registry can provide advice about appropriate pay rates derived from market information. It may also act as a liaison between the caregiver and client by relaying offers and counteroffers.
  • Receiving Continuous Payments for (Caregiver) Services. Fees based on an initial referral or administrative efforts are not indicative of employer status; fees based on hours worked by the caregiver are so indicative.
  • Paying Wages. A registry may perform payroll-related functions without creating an employer relationship, as long as the wages are paid directly by the client or through an escrow fund. Payment of funds directly by the registry, even if reimbursed by the client, however, indicate employer status.
  • Tracking (Caregiver) Hours. Tracking and independently verifying time worked indicates employer status. The collection of timesheets for purposes of payroll processing does not implicate employer status.
  • Purchasing Equipment and Supplies. If the registry purchases equipment for the caregiver, or directs the purchase of specified equipment and supplies, or pays for licensing and training, this suggests employer status.
  • Receiving EINs or 1099s. The fact that a caregiver has an Employer Identification Number (EIN) or receives 1099s from the registry is not determinative of independent contractor status.