The United States Department of Labor (“DOL”) finalized a rule aimed to clarify the standard for whether a worker is an employee or an independent contractor under the Fair Labor Standards Act (“FLSA”).  The minimum wage, overtime, and other worker protections in the FLSA only apply to employees, not independent contractors.  This regulatory guidance supersedes the DOL’s previous interpretations of independent contractor status under the FLSA. The final rule is effective March 8, 2021.

Previously, courts and the DOL have used the multi-factor “economic reality” test to determine whether a worker should be classified as an employee under the FLSA or as an independent contractor. The final rule codifies the inquiry into five (5) distinct factors.

  • The Economic Reality Test. The ultimate inquiry is economic dependence. As a matter of economic reality, if an individual is in business for him- or herself, such individual is an independent contractor, as distinguished from an “employee” under the FLSA.
  • 5 Core Factors. The five core factors of the economic reality test laid out in the final rule are the following:
  1. The nature and degree of control over the work. This factor weighs towards the individual being an independent contractor to the extent that the individual, as opposed to the employer, exercises substantial control over key aspects of the performance of the work (e.g., the individual’s ability to set his or her own schedule, select his or her projects, and work for others).
  2. The individual’s opportunity for profit or loss. This factor weighs towards the individual being an independent contractor to the extent that the individual has an opportunity to earn profits or incur losses based on his or her exercise of personal initiative, skill or business acumen, and through the ability to manage investment in or capital expenditure on help, equipment, or material to further his or her work.
  3. The amount of skill required for the work. This factor weighs towards the individual being an independent contractor to the extent that the work requires specialized training or skill. Conversely, this factor weighs towards employment to the extent that the work at issue requires no specialized training or skill, and/or the the individual is dependent on the potential employer to provide specialized training or skills.
  4. The degree of permanence of the working relationship between the worker and the potential employer. This factor weighs towards the individual being an independent contractor to the extent that the work relationship is definite in duration or sporadic, rather than when it is indefinite, no specific duration or continuous in the case of an employee.
  5. Whether the work is part of an integrated unit of production. This factor weighs towards the individual being an employee to the extent that the individual’s work is a component of the potential employer’s integrated production process for a good or services, versus when the individual’s work is segregable from the potential employer’s production process in the case of an independent contractor.
  • Probative Value of First Two Factors. The final rule provides that no single factor is dispositive. However, the rule does specify that the first two factors are “the most probative” as to whether an individual is an economically dependent employee. As a result, these two carry greater weight in the independent contractor analysis than other factors. Furthermore, if both of the first two factors point towards the same classification there is a substantial likelihood that it is the individual’s accurate classification.
  • Additional Factors. The rule also states that the core factors are not exhaustive, and that additional factors may be relevant in the independent contractor status inquiry, but only if the factors indicate that the individual is in business for him- or herself.
  • Importance of Actual Practice. The final rule advises that the actual practice of the parties involved is more relevant than what may be contractually or theoretically possible.

The DOL Rule can be found at https://www.govinfo.gov/content/pkg/FR-2021-01-07/pdf/2020-29274.pdf.

* * * * *

Should you have any questions regarding the above, please contact the Garfunkel Wild attorney with whom you regularly work, or contact us at info@garfunkelwild.com.

Click Here to download the Legal Alert.

On December 27, 2020, a $900 billion dollar pandemic relief package was signed into law.  The relief package, among other things, impacts provisions of the Families First Coronavirus Response Act (“FFCRA”), which was set to expire on December 31, 2020.  Under the FFCRA, employers with fewer than 500 employees were required to provide their employees with emergency paid sick leave and emergency paid family and medical leave for specified reasons related to COVID-19 through December 31, 2020.  Despite speculation that the paid leave requirement would be extended into 2021, Congress did not extend this mandate. Thus, after December 31, 2020, covered employers are not mandated to provide paid leave under the FFCRA.

Employers may, however, continue voluntarily providing paid leave as provided for under the FFCRA and receive tax credits/refunds through March 31, 2021.  The new law extends the FFCRA refundable tax credits to employers who provide employees with paid leave through March 31, 2021.  Though the FFCRA’s tax credit is extended to 2021, it does not make an employee eligible for any additional leave under the FFCRA.  Thus, if an employee has exhausted all available FFCRA leave prior to December 31, 2020, they will not be eligible for additional leave in 2021. However, if an employee has not done so, an employer can opt to extend their deadline to utilize their leave to March 31, 2021.

Importantly, employers must also consult State sick leave laws for additional requirements that may provide for other paid sick leave benefits for employees who are affected by covid-19 in 2021.

* * * * *

Should you have any questions regarding the above, please contact the Garfunkel Wild attorney with whom you regularly work, or contact us at info@garfunkelwild.com.

Click Here to download the Legal Alert.

 

Tuesday, January 26, 2021 | 12:00 pm – 1:00 pm (EST)

Speaker:   Marianne Monroy, Salvatore Puccio and Lauren Levine

Garfunkel Wild’s Marianne Monroy, Salvatore Puccio and Lauren Levine will present the webinar “Handling COVID-19 Employee Vaccinations, Updated Leave Entitlements & Addressing Violations of COVID-19 Protocols″ on January 26, 2021.

As the vaccination rollout continues, there are many common questions facing employers. This webinar will address how best to respond to new types of employee questions and issues that arise. Our employment team will address both legal and pragmatic concerns for these and other related issues. Below are just a few types of questions we will be addressing in Garfunkel Wild’s ongoing series of COVID-related employment updates.

  • Can we mandate vaccination of our employees?
  • What are the recent changes to applicable COVID-19 leave laws?
  • How can we address violations of employer’s COVID-related workplace policies?

Click Here To Register.

 

Thursday, January 28, 2021 | 2:00 pm – 3:00 pm (EST)

Speaker: Jeffry Adest, Partner / Director, Garfunkel Wild, P.C. and Alicia Shickle, President of the Documentation and Coding Compliance/Audit Division, Garfunkel Health Advisors, Inc.

Garfunkel Wild’s Jeffry Adest and Garfunkel Health Advisors Alicia Shickle will present the webinar “2021 FQHC Forecast: Key Trends and Essential Strategies″ on January 28, 2021.

Join us as we discuss and review FQHCs 2021 trends and strategies including:

  • OIG Opinion Permitting FQHCs to Offer Gift Cards to Patients. A recent OIG opinion has placed focus on the exceptions permitting FQHCs to provide incentives to individuals to promote preventative care. We will discuss and provide practical guidance on those exceptions.
  • New 2021 O/OP Evaluation & Management Guidelines, and billing for Principal Care Management Services. It is critical that the FQHC community understand the new 2021 Evaluation and Management guidelines and how to apply them to FQHC billing. This webinar will provide practical guidance on the most important aspects of the new rules, and discuss best practices to reduce your audit and compliance risks.
  • COVID-19 Concerns for FQHCs. Topics to include vaccine administration and billing

Click Here To Register.

The Office of Inspector General (“OIG”) posted OIG Advisory Opinion 20-08 on Tuesday, December 30, 2020. The Opinion permits an FQHC to offer $20 gift cards to incentivize pediatric patients who have missed two (2) or more previously scheduled preventative and early intervention care appointments within the previous six (6) months. We note that this Opinion expands the existing “preventative care exception”, which permits incentives given to individuals to promote preventative care in specific circumstances, in that this Opinion allows the incentives even where the visits do not qualify as preventative care.

The OIG opinion can be found here.

We will be hosting a webinar addressing this issue, and other relevant FQHC updates including details on the 2021 O/OP Evaluation & Management Guidelines, and billing for Principal Care Management Services.

January 28, 2021 | 2:00 pm – 3:00 pm (EST)
REGISTER HERE

* * * * *

Should you have any questions regarding the above, please contact the Garfunkel Wild attorney with whom you regularly work, or contact us at info@garfunkelwild.com.

Click Here to download the Legal Alert.