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SHRM Newsletter: DOL Issues Guidance on Independent Contractors
Posted on Jul. 23, 2015

This is Utah SHRM Legal-mail no. 2015-12 prepared for Salt Lake SHRM, the Human Resources Association of Central Utah (HRACU), the Northern Utah Human Resources Association (NUHRA), the Color Country Human Resources Association (CCHRA), the Bridgerland Society for Human Resource Management and Utah at-large members of the national Society for Human Resource Management (SHRM).

CONTENTS:

- DOL ISSUES GUIDANCE ON INDEPENDENT CONTRACTORS

- EEOC SAYS ORIENTATION BIAS BANNED UNDER “SEX” PROTECTED CLASS

- WHICH RESTROOM TO USE AT WORK?

- THIS CEO MAY HAVE JUST COST HIS COMPANY $18 MILLION

- COLORADO COURT REJECTS MARIJUANA WRONGFUL DISMISSAL CASE

DOL ISSUES GUIDANCE ON INDEPENDENT CONTRACTORS: The United States Department of Labor (DOL) has published a new guidance memo to employers on the classification of workers as employees or independent contractors. DOL asserts that misclassification is a serious problem for workers, legal compliance and the overall economy. DOL’s new memo says that because the Fair Labor Standards Act (FLSA) broadly and liberally interprets the words “employ” and “employee,” most workers should be classified as employees, not independent contractors. DOL says the essential issue, based on a review of several factors, is whether the worker is economically dependent on the employer or in business for himself/herself. DOL zeroes in on six specific points of analysis: (1) Is the Work an Integral Part of the Employer’s Business? (2) Does the Worker’s Managerial Skill Affect the Worker’s Opportunity for Profit or Loss? (3) How Does the Worker’s Relative Investment Compare to the Employer’s Investment? (4) Does the Work Performed Require Special Skill and Initiative? (5) Is the Relationship between the Worker and the Employer Permanent or Indefinite? (6) What is the Nature and Degree of the Employer’s Control? You can read the new DOL guidance memo here: http://www.dol.gov/whd/workers/Misclassification/AI-2015_1.htm and read more about it here: https://blog.dol.gov/2015/07/15/employee-or-independent-contractor/.  Given the new DOL focus on this issue, you should consult with your employment lawyer on the propriety of your independent contractor classifications.

EEOC SAYS ORIENTATION BIAS BANNED UNDER “SEX” PROTECTED CLASS: The Equal Employment Opportunity Commission (EEOC) has issued a ruling concluding that job bias against a person based on sexual orientation is illegal bias based on sex and thus is already prohibited by applicable law. In a 3-2 decision, the EEOC said that sexual orientation and gender identity are inherently tied to sex and thus part of the existing protected class. According to one news report, the EEOC “determined that an air traffic controller’s allegations of discrimination based on sexual orientation against his employer, the Federal Aviation Administration, stated a valid claim of discrimination based on sex under Title VII of the Civil Rights Act of 1964, as amended.” The EEOC has long-signaled that this will be its position. Some courts disagree with this conclusion so there is bound to be more litigation on this point. However, until instructed otherwise by the Courts, the EEOC will assert this position in all administrative and enforcement matters.

WHICH RESTROOM TO USE AT WORK? The recent high-profile news story about Bruce/Caitlyn Jenner has spawned a number of interesting employment article headlines, most on the theme of “which restroom should Caitlyn Jenner use at work?” As noted in previous updates, federal law seems to indicate that employees should be allowed to use the bathroom specific to the gender they consider themselves to be. Recently, the United States Department of Labor (DOL) Occupational Safety and Health Administration (OSHA) released a guide for employers flatly stating that transgender employees should be allowed to use the bathroom that corresponds to their gender identity. Federal law requires all employers to provide employees with sanitary and available toilet facilities so that employees will not suffer the adverse health effects that can result if toilets are not available when employees need them. The new guide states that making transgender employees use bathrooms inconsistent with their identity, or gender-neutral bathrooms segregated from others, “singles those employees out and may make them fear for their physical safety.” The guide also states that “Bathroom restrictions can result in employees avoiding using restrooms entirely while at work, which can lead to potentially serious physical injury or illness.”  A copy of the guide can be found here: https://www.osha.gov/Publications/OSHA3795.pdf.  This is an emerging issue for employers on numerous fronts. For example, the EEOC has ruled that the Army discriminated against a transgender woman by not allowing her to use the women’s restroom and recently filed a similar suit (see below). Federal contractors also are prohibited from discriminating against employees based on gender identity. The federal government also has issued a guide for federal employers on how to deal with similar issues, see: http://www.opm.gov/policy-data-oversight/diversity-and-inclusion/reference-materials/addressing-sexual-orientation-and-gender-identity-discrimination-in-federal-civilian-employment.pdf.

THIS CEO MAY HAVE JUST COST HIS COMPANY id="mce_marker"8 MILLION: A federal district court in New York recently upheld an id="mce_marker"8 million jury verdict rendered against a company based on its CEO’s sexual harassment of female employee from Sweden. The CEO allegedly told the plaintiff, during a job interview, that he really wanted a girlfriend. She declined interest but the CEO hired her anyway and then over the next few months did the following to her: commented on her appearance, purchased tight clothes for her, kissed her, ogled her, asked her out, said she could advance by sticking close to him, grabbed her and attempted to have sex with her during business trips. He terminated her employment when he found another man in her apartment. Thereafter he posted Facebook images of her pasted onto pornographic images. The jury found that this behavior was sex harassment and awarded the former employee id="mce_marker"8 million in damages. The trial judge upheld the verdict, which presumably will be appealed.

COLORADO COURT REJECTS MARIJUANA WRONGFUL DISMISSAL CASE: The Colorado Supreme Court has rejected a claim by a marijuana user that he was wrongfully terminated from employment due to his drug use, which was legal under state law. The relevant Colorado statute prohibits “termination” of an employee “due to that employee's engaging in any lawful activity off the premises of the employer during nonworking hours unless such a restriction: (a) Relates to a bona fide occupational requirement or is reasonably and rationally related to the employment activities and responsibilities of a particular employee or a particular group of employees, rather than to all employees of the employer; or (b) Is necessary to avoid a conflict of interest with any responsibilities to the employer or the appearance of such a conflict of interest.” The court concluded that the statute did not apply because marijuana use remains unlawful under federal criminal law statutes. So much for the “Rocky Mountain High,” at least regarding employment, eh?

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mikeAttorney Michael
Patrick O'Brien

Mike O’Brien is an experienced and accomplished employment attorney, media lawyer and courtroom litigator.  He is active in SHRM and has received the highest possible reviews from rating services like Martindale - Hubbell (AV rating), Chambers USA, Utah Business Legal Elite, Best Lawyers in America, Who’s Who Legal USA, and SuperLawyers.  HR Executive Online has named him as one of America’s most powerful 100 employment lawyers, but keep in mind, this does not mean he is good at moving heavy furniture.

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Michael Patrick O'Brien
 

Best Lawyers In America, “Salt Lake City Best Lawyers Employment Law Lawyer Of The Year,” 2011-2012

Best Lawyers In America, First Amendment Law, Labor And Employment Law, 2005-2012

Chambers USA, Labor & Employment, 2003-2011

Employment Lawyer Of The Year, Utah State Bar, 2001

Human Resources Executive, Nation’s Most Powerful Employment Lawyers In America, 2010

Mountain States Super Lawyers, 2007-2012

Utah Business Magazine, Legal Elite, Labor And Employment, 2006-2012