US Department of Labor’s Final Rule on Independent Contractor vs Employee is Ready to Set New Standards

By Anthony J. Caruso, Jr., Esq.

On January 10, 2024, the US Department of Labor (DOL) published the Final Rule (standards) for assessing whether a worker is an independent contract or employee in the Federal Register. The Final Rule is scheduled to take effect on March 11, 2024

The Final Rule is a six factor Economic Reality Test:

Opportunity for Profit or loss depending on managerial skill.
Investments by the worker and the potential employer.
Degree of permanence of the work relationship.
Nature and degree of control.
Extent to which the work performed is an integral part of the potential employer’s business.
Skill and initiative.

The above factors will determine whether the worker is an independent contractor vs employee in the following areas of concern for businesses

Fair Labor Standards Act (FLSA) as to minimum wage and overtime.
Internal Revenue Code as to taxes and liabilities.
State workers’ compensation and unemployment insurance laws as to benefits and liabilities.
State law as to collection of debt/child support and various liens and liabilities.
State exemption laws for industry (e.g. trucking) existing tests of independent contractor vs employee used by federal and state government agencies.
Internal Revenue Service – 20 Factor Test.
ABC Test
Direction and Control Test.

It is anticipated that the Final Rule on or before March 11, 2024 will be contested in the courts. Such litigation will be contentious and probably end up in the US Supreme Court.

Music as Harassment – Will the Real Slim Shady please … sit down?

By Alan E. Seneczko, Esq.

Have you ever wondered whether some hip-hop music, with its misogynistic, sexually graphic lyrics and frequent use of the “n-word,” could form the basis of a harassment claim if played in the workplace? If so, you now have an answer.

In Sharp v. Activewear, L.L.C., 69 F.4th 974 (9th Cir. 2023), the Ninth Circuit addressed the question of whether music with sexually derogatory and violent content, played constantly and publicly throughout the workplace, can create a hostile or abusive environment and constitute discrimination because of sex.

The court held that it could.

In Sharp, eight employees (seven women and one man) took offense to the company’s practice of blasting “sexually graphic, violently misogynistic” music throughout its 700,000 sq. ft. warehouse with commercial strength speakers. The music included Eminem’s “Stan,” which describes extreme violence against women, including stuffing a pregnant woman into the trunk of a car, a song by Too $hort that glorifies prostitution, and others that denigrated women and used words like “hos” and “bitches.” The employer contended the music was “motivational,” despite near daily objections.

Questions? Contact Al by email or at (262)560-9696

Questions? Contact Jim by email or at (952)746-1700

DEI Done Right - Easier Said Than Done

By James B. Sherman, Esq.

Promoting diversity, equity, and inclusion, or DEI in the workplace seems a worthy goal for any employer. After all it is the ethical thing to do, right? And if DEI is ethical, you might think it would be simple enough for any ethical business to implement. Just do the right thing by people, right? But what exactly is DEI? It turns out this simple three-letter acronym means many different things to different people. A poignant example can be found in a recent exchange on social media between billionaire and “Shark,” Mark Cuban and EEOC Commissioner, Andrea Lucas. Cuban reportedly posted on X (formerly Twitter) that while he would never base hiring decisions solely on race, gender, religion, etc., these characteristics “can be part of the equation.” The post prompted Lucas to respond that Cuban was “dead wrong on black-letter Title VII law.” Clearly there is more to DEI than many people think, and misinterpretations can have serious legal consequences.

I have written prior articles warning employers that DEI done wrong can get them sued. The recent Supreme Court decisions striking down race-conscious admissions at Harvard and UNC are the most publicized examples. However, there are a growing number of lawsuits claiming DEI initiatives in workplaces amount to unlawful discrimination against those who are excluded. Employers who hopped aboard the DEI bandwagon with little regard to what it actually entails, are playing with fire. DEI must be more than virtue signaling, or adopted because it is deemed “good for business.” DEI done right starts with identifying what it means, and with a keen understanding of what it cannot mean under the law. For as the Greek philosopher Aristotle wrote more than 2000 years ago: “Shall we not, like archers who have a mark to aim at, be more likely to hit [it].”.

Proud Moments To Share

Wessels Sherman President & CEO, James Sherman, is selected to the 2024 Minnesota Super Lawyers list!

Super Lawyers, a Thomson Reuters business, is a rating service of outstanding lawyers from more than 70 practice areas who have attained a high-degree of peer recognition and professional achievement. The annual selections are made using a patented multiphase process that includes a statewide survey of lawyers, an independent research evaluation of candidates and peer reviews by practice area. Only the top 5 percent of attorneys in Minnesota are included in the annual Super Lawyers List.

Mr. Sherman continues to receive this annual honor reserved for highly rated attorneys practicing in Minnesota. Wessels Sherman is proud Jim has once again been selected to this prestigious list of the top 5% of practitioners as a management-side labor and employment attorney.

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