A Word from Jennifer Boaz
President, Investigative Services, EMT Holdings
In my former employment, I spent the better part of eight years as the company legal representative (30(6)(b)) regarding misclassification at both the state and federal levels. I currently serve in this role as well. No, I am not an attorney, nor do I profess to be one. But I have been taught, and I have taken to heart, information from some of the best Employment Law teams in the industry.
One fundamental lesson is that any company can establish contracts and business strategies; it's all about defining the level of risk you're comfortable with and ready to defend in legal proceedings.
Make no mistake, I am pro Independent Contractor, regardless of industry. I see the entrepreneurial spirit of the Independent Contractor as an integral part of how our nation was formed and continues to grow. The Independent Contractor allows private individuals to take a chance on themselves and build companies with a safety net of small business support. When companies engage properly, the Independent Contractor status is a win for both the company providing contracting opportunities and the individual small business/sole proprietorship.
New Labor Rulings
In January 2024, the U.S. Department of Labor published the issuance of the final rule, Employee or Independent Contractor Classification Under the Fair Labor Standards Act, effective March 11, 2024. This final rule revises the Department’s guidance on how to analyze who is an employee or independent contractor under the Fair Labor Standards Act.
The mainstay of the final rule calls out that an individual is not an independent contractor if they are, “as a matter of economic reality, economically dependent on an employer for work.” Regardless of the status title on your contract, if a company restricts your ability to gain additional revenue or business by ANY other means, you should be classified as an employee.
What Does It Mean for You
This call-out has a direct impact on noncompete clauses and is consistent with judicial precedent and the Department’s interpretive guidance prior to 2021. Additionally, companies will find it hard to defend, especially in our industry, when they infer minimum production requirements to the independent contract as not being implied expectations and potentially a risk of misclassification.
I expect there is the potential for several new Federal misclassification lawsuits relative to the new rulings even with the given quantities of arbitration agreements in place. For more information to determine if your contract or working relationship has risks, see Fact Sheet 13: Employment Relationship Under the Fair Labor Standards Act (FLSA).
Have You Ever Worked as an Independent Contractor?
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Benefits of Independence
With the continual enhancement of labor protections that benefit independent contractors, embracing a life of independence has become increasingly appealing. These mandates ensure fair treatment and rights for contractors, fostering a sense of security and stability in their work. It's evident that individuals appreciate the autonomy and flexibility that comes with being an independent contractor, as shown by our team's steady growth rate of 10% per week. This remarkable expansion serves as tangible proof that many find fulfillment and success in this mode of engagement.
While we'll delve deeper into the life of an independent background investigator in forthcoming blogs, it's clear: don't dismiss the benefits of independence until you've experienced them firsthand.
Until Next Time,
Jennifer Boaz
President of Investigative Services
EMT Holdings
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