New DOL Rule Independent Contractor Classifications
New Department Of Labor Rule in Effect March 11 Affects Employee/Independent Contractor Classifications
Businesses relying on independent contractors need to know about the US Department of Labor’s new 6-factor test for determining worker classification under the Fair Labor Standards Act. This test narrows who is an “independent contractor,” and goes into effect March 11, 2024.
Key Changes in Worker Classification: New 6 Factor Test Used In Determining Worker Status. Factors considered:
- 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; and
- Skill and initiative.
DOL says these factors aren’t exhaustive. Instead, the analysis uses a totality-of-the-circumstances “economic reality” approach, allowing consideration of other relevant factors that “in some way indicate whether the worker is in business for themself.” Where the worker is dependent on the employer for work, they will not qualify as an independent contractor under this rule. Importantly, only the courts, federal and state agencies decide classification, not the employer or the worker.
Diverse Classification Standards:
Notably, this rule solely addresses DOL’s interpretation under the FLSA and does not supersede other law, such as state “ABC Tests,” IRS interpretations of common law, etc.
Serious Consequences for Misclassifying Workers:
- Owing double the worker’s damages
- Paying the other side’s attorney’s fees and costs
- Individual liability: individuals with a hand in misclassification aren’t shielded by the corporation; and
- To the extent a settlement is reached, the agreement itself—and the amounts paid—is public information.
- Not including IRS and/or DOL penalties.
What Employers Should Do Now:
- Review existing and future independent contractor arrangements against the new framework.
- Consider conducting a worker classification audit using the updated criteria.
- Explore the IRS Voluntary Classification Settlement Program (VCSP) with guidance from a CPA.
- Seek legal advice to understand the implications and ensure compliance.
If you would like for us to assist you in navigating the complexities of worker classification, please contact attorney Casey Martens at cmartens@kimandlahey.com or 864.973.6688.
B C Killough named Thomson Reuters Stand-Out Lawyer
CHARLESTON, SC – Kim Lahey & Killough law firm is pleased to announce that B.C. Killough has been named to the list of “Stand-out Lawyers” by Thomson Reuters. Each year, thousands of senior in-house legal counsels from around the world nominate the top three attorneys they have worked with during the past year.
Bill Killough has been recognized for decades by his peers in publications such as The Best Lawyers in America, South Carolina Super Lawyers and Charleston Business Magazine’s Legal Elite. Best Lawyers named him the “Corporate Lawyer of the Year” for the Charleston area in 2015. These client-nominated attorneys are “real stand-out lawyers [and] are distinctive because, in combination with their technical competence, they offer business savvy advice, deliver exceptional service, or integrate well with the client team,” according to Thomson Reuters.
Bill Killough practices law in the areas of intellectual property and business law, including commercial transactions. He is a registered patent attorney and has obtained more than 350 patents for clients and filed more than 1500 trademark applications on behalf of clients. He has experience as an intellectual property litigator, with at least one of his cases setting precedent. As a certified mediator, Killough assists parties in intellectual property and corporate disputes in coming to a resolution outside of a courtroom.
With offices in Greenville and Charleston, SC and Brevard, NC, the Kim, Lahey & Killough Law Firm is devoted to helping clients achieve their business goals and establish, enforce, and leverage their intellectual property rights from the Upstate, to the Lowcountry to across the globe.
Casey Martens admitted to NC Bar and GA Bar
Congratulations to Kim, Lahey & Killough attorney Casey Martens, who has recently been admitted to both the North Carolina and Georgia Bars. Casey heads up our Brevard, NC office and serves clients in GA, NC and SC in the areas of employment law counseling and compliance, employee investigations, wage and hour disputes, business disputes and litigation, contracts, and trademark analysis and registration.
A graduate of the University of Colorado and the Charleston School of Law, Casey has regularly been named as a Legal Elite of the Upstate by Greenville Business Magazine and a South Carolina Super Lawyers Rising Star as a Top Rated Employment and Labor Attorney.
With offices in Greenville and Charleston, SC and Brevard, NC, the Kim, Lahey & Killough Law Firm is devoted to helping clients establish, enforce, and leverage their intellectual property rights from the Upstate, to the Lowcountry to across the globe.
Kim, Lahey & Killough 2023 SC Super Lawyers
Kim, Lahey & Killough attorneys listed in
2023 South Carolina Super Lawyers
Kim, Lahey & Killough attorneys Doug Kim, Seann Lahey, and B.C. Killough have been named in the 2023 South Carolina Super Lawyers list as top-rated intellectual property attorneys and Casey Martens has been named in the 2023 South Carolina Rising Stars list as a top-rated employment and labor attorney in the Greenville and Charleston markets.
Each year, no more than five percent of the lawyers in the state are selected by the research team at Super Lawyers to receive the honor of inclusion on the Super Lawyers list and no more than 2.5 percent of the lawyers in the state are selected to be listed as Rising Stars.
Greenville patent attorney Doug Kim, founder of Kim, Lahey & Killough, has been included in the South Carolina Super Lawyers list annually since 2017. Kim concentrates his law practice in the areas of brand protection, invention protection, licensing, contracts, company formation, Internet and domain name, data security and privacy, patents, trademarks, copyright, technology transfer, IP litigation, trade secrets, Internet & domain name pursuits, business disputes & resolutions. In addition to Super Lawyers, Doug Kim has previously been named the to the Greenville, SC Best Lawyers® list, named the Trademark Lawyer of The Year, the Best Lawyers® Patent Lawyer of The Year, an IP Star by Managing Intellectual Property magazine and a Legal Elite of the Upstate by Greenville Business Magazine.
Charleston patent attorney B.C. Killough adds his ninth year as a named attorney to the South Carolina Super Lawyers list in the area of intellectual property law. Killough’s practice areas include brand protection, invention protection, licensing, contracts, company formation, Internet and domain name, data security and privacy, patents, trademarks, copyright, technology transfer, IP litigation, trade secrets, Internet & domain name pursuits, business disputes & resolutions, commercial transactions, and mediations of intellectual property and commercial disputes. Killough has been honored as a Senior Fellow by the Litigation Counsel of America, holds an AV preeminent rating with Martindale-Hubbell, was previously named the Best Lawyers Corporate Lawyer of the Year for the Charleston market and has been recognized by Charleston Business Magazine as a Legal Elite in the area of Intellectual Property and Innovation.
Greenville patent attorney Seann Lahey joins colleagues Doug Kim and B.C. Killough on the Super Lawyers list for their work in intellectual property matters. Seann Lahey’s intellectual property law practice regularly includes work in trademarks, copyrights, trade secrets licensing matters, and he has extensive experience dealing with international and U.S. patent prosecution. He has also been recognized by Greenville Business Magazine as a Legal Elite of the Upstate for his work in intellectual property law.
Super Lawyers South Carolina Rising Star Casey Martens practices employment and business law in both the Greenville SC and Brevard NC offices of Kim, Lahey & Killough. Her law practice focuses in the areas of business disputes and litigation, state and federal employment law, corporate formation, drafting and enforcement of contracts, business disputes involving interference with client relations, individual and business defamation, collections, and enforcement of non-compete agreements. She has also been previously recognized by Greenville Business Magazine as a Legal Elite of the Upstate.
About Super Lawyers
Super Lawyers, part of Thomson Reuters, 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.
About Kim, Lahey & Killough
With offices in Greenville and Charleston, SC and Brevard, NC, the Kim, Lahey & Killough Law Firm is devoted to helping clients establish, enforce, and leverage their intellectual property rights from the Upstate, to the Lowcountry to across the globe.
Kim & Lahey Attorneys Honored in 2021 Legal Elite
The Kim & Lahey Law Firm is proud to announce that our attorneys are being honored by Greenville Business Magazine as part of South Carolina’s 2021 Legal Elite. This is the second year in a row that all Kim & Lahey attorneys have made the list.
Greenville Business Magazine’s Legal Elite is the only regional awards program that allows every active attorney to nominate and vote for their peers across 26 categories. The following are the Kim & Lahey attorneys selected for inclusion, as well as the practice areas in which their work is recognized:
Douglas Kim: Intellectual Property and Innovation – Business Litigation
Seann Lahey: Intellectual Property and Innovation – Business Litigation
Jason Rosen: Tax and Estate Planning – Corporate Law, Mergers, and Acquisitions
Casey Martens: Labor and Employment
Thank you to all of our peers who voted and congratulations to all of the South Carolina attorneys who are being recognized this year.
Are Your Non-competes Null & Void?
Why You Should Re-examine Employment Contracts Post COVID-19.
If you had to lay off employees during the global shutdown, there is more than safety to consider as you begin to reopen. Your re-hired employees may need to sign new employment contracts, or you risk not being able to enforce the restrictive covenants employees agreed to when they were first hired.
Earlier this month, pharmaceutical company Novo Nordisk Inc. was prevented from enforcing a confidentiality and noncompete agreement it had with an employee who was briefly laid off and then rehired before leaving to work for another pharmaceutical company.
Novo Nordisk sought to enforce the agreement that prohibited the employee from working for a competitor for a year after the end of his employment. The employee was laid off in 2018 and rehired a few days later but was not asked to sign a new agreement upon his return.
Was there a break in employment?
The court said for the employee to continue to be bound to not compete beyond 2019, “Novo Nordisk would have needed to ensure there was no break in employment.” It relied on the unambiguous language of two documents:
- The termination letter stated his employment “ended effective August 3, 2018.”
- The rehire letter offered him a “new position” “effective August 6, 2018.”
The court determined there was a clear break in employment. As such, the employee was no longer bound by the “old” terms of his “previous” employment. Download full findings: Russomano v. Novo Nordisk Inc., 1st Cir., No. 20-1173, 6/2/20.
What to do next.
We want our clients to be aware of the potential pitfalls involved when there’s a break in employment, even when it’s only for a few days. What constitutes a break in employment will depend on the facts of each case, especially the language used in the documents at issue. You will most likely need to re-execute new agreements when employees return to work.
Need our help?
Casey Martens offers services in state and federal employment law, drafting and enforcement of contracts, business disputes involving interference with client relations, defamation, collections and enforcement of non-compete agreements. You can reach her at cmartens@kimandlahey.com.
New COVID-19 Employment Laws to Consider
Temporary and permanent layoff and termination decisions are a difficult reality for many in the business community now. State agencies and the federal government are adjusting employment laws in response to the COVID-19 pandemic. If layoffs and terminations are your next moves, be sure to consider new laws that might affect those decisions.
Employers Allowed to File Unemployment Claims
The SC Department of Employment and Workforce is allowing employers who have to temporarily lay off workers to file claims for unemployment insurance benefits on their workers’ behalves, for up to six weeks. Doing this serves two purposes: (1) it exempts your employees from SCDEW’s typical work search requirement during the six weeks; and (2) your workers will be ready to get right back to work once you reopen for business. The claim must be submitted after the week of layoff is over, but within 14 days of the claim week ending date. Applications are available on SCDEW’s website.
New Federal Leave Laws In Effect
The “Families First Coronavirus Response Act” (FFCRA”) went into effect April 1, 2020, and effects many employees’ rights to leave. At bottom, the FFCRA requires covered employers to grant two weeks of paid sick leave to qualifying employees, and potentially an additional ten weeks of paid leave (the first ten days of which is unpaid) for employees caring for minor children whose schools or childcare facilities/ caregivers are closed or unavailable due to COVID-19. Whether your business qualifies as a “covered employer,” and whether specific employees qualify for the Act’s relief are fact-specific. As such, you should consult with an employment attorney about how the FFCRA may be implicated in your termination/ lay-off decisions.
We Can Help
We’re happy to help ease your burden during this difficult time. If you have questions about how these new laws may affect your business and your decisions about employees, please contact Attorney Casey Martens at cmartens@kimandlahey.com.