Misclassification of Independent Contractors Gains Attention in Home Care
Recently, the US Department of Labor (DOL) implemented a project to reduce the improper classifications of employees as “independent contractors” in all types of workplaces (see more here). The DOL Misclassification Initiative involves an education campaign, clarified guidance, and collaborative efforts with state labor departments. The DOL concern with misclassifications is related to the impact on workers under the Fair Labor Standards Act (FLSA) protections for minimum wage and overtime compensation. Over the years, DOL has raised concerns about misclassifications in home care. Now, a federal court ruling against a home care registry highlights the risks of misclassifications in home care.
On July 30, 2015, the U.S. District Court for the Northern District of Florida issued an order finding that a home care registry, operating under Florida registry licensure, improperly classified a Certified Nursing Assistant (CNA) worker as an independent contractor. The court applied the “economic-reality” test applicable under the FLSA in reaching its decision. The economic-reality test is different than the standards applied by other federal and state agencies. As a result, a worker may be classified properly as an independent contractor under the IRS 20-factor control test, while the same worker may be considered an employee under the FLSA economic-reality test.
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