Uber_app_icon - wikimedia commonsRonald Reagan famously once said: “The nine most terrifying words in the English language are ‘I’m from the government and I’m here to help.'”

On January 13, 2015, the State of Florida entered into an agreement with the U.S. Department of Labor (“DOL”) with the goal of preventing the misclassification of employees as independent contractors. It is part of DOL’s “Misclassification Initiative.” Nationally, this initiative has meant a significant increase in the number of investigations undertaken by DOL, and Florida employers can expect greater scrutiny in light of the agreement with DOL.

How’s the initiative going so far? Two very recent cases caught our attention. Just a few days ago FedEx settled with the DOL by agreeing to pay $227 million to delivery drivers in California that were classified as independent contractors. FedEx will bounce back – aren’t drones going to be delivering packages soon anyway?

How about this one though? In California (which also has a work-sharing agreement with DOL on the initiative), the state’s Labor Commission recently ruled that an Uber driver should be classified as an employee and not an independent contractor. Uber is very likely to appeal, but the ruling is likely to encourage more claims – perhaps even class actions. As a side note, in May, Florida’s Division of Economic Opportunity said an Uber driver should be an employee for unemployment benefits. Uber is appealing.

The Take Away

If your company utilizes independent contractors, or is thinking of it, have the classification very thoroughly reviewed. You might start by brushing up on DOL’s Fact Sheet #13 which provides general information and factors the agency looks to in determining the proper classification. And, if a DOL investigator knocks on the door and utters the nine terrifying words – slam the door closed, turn off the lights . . . . Just kidding, of course. While investigators do show up at the door unannounced, they will typically advise the employer of the purpose of the investigation and, if requested, will give at least a few days to seek counsel. If this happens in your workplace, you should consult your employment law counsel as soon as possible.

Image Courtesy of Wikimedia Commons