Back in Time: U.S. DOL Withdraws More Opinion Letters

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The Grawe Gazette – General Counsel

Back in Time: U.S. DOL Withdraws More Opinion Letters
By Doug Grawe, The Grawe Group, LLC, February 2021

My calendar says it is 2021. The U.S. DOL keeps telling us it is 2016. Friday the DOL withdrew two more opinion letters issued in the last 4 years. Since January, the DOL has been sending federal law back in time 4 years, and it is reasonable to assume that will continue.

U.S. DOL withdraws two 2019 opinion letters

This week the DOL turned back the clock on independent contractors in the gig economy (letter FLSA2019-6) and on pay for drivers while in the truck sleeper berth (letter FLSA2019-10). The DOL withdrew 2019 opinion letters on those topics. The DOL did not issue any new rules, and their withdrawal of the opinion letters does not necessarily make new rules, but the DOL’s actions make it clear they will interpret the law the way the Obama administration interpreted the law, and not the way the Trump administration interpreted the law.

This highlights the nature of the government’s relationship with industry is shifting. The shift is less employer-friendly, but as employers we can weather these shifting government winds with good employment practices.

Labor and employment issues see government attitude shift:

  • Independent Contractor Status – U.S. House re-introduced the PRO Act this year – a buffet of labor-friendly policies that includes the ABC test for independent contractor status.
    • Limit control, and walk-the-walk on IC status from recruiting to contract termination.
  • Labor Organizing – see the PRO Act.
    • Communicate with your team often. Be fair, be consistent with your team.
  • Joint Employment – Prior to 2016 DOL wanted to hold franchisors, general contractors, manufacturers, shippers, 3PLs, and any business that uses temp labor or subcontractors, liable for any violations by subcontractors, franchisees, and temp agencies.
    • Reserve as little control as possible.
  • Driver Pay – state-level actions have attacked piece rate pay, and plaintiff lawyers have attacked sleeper berth time; the DOL’s withdrawal of the sleeper berth opinion letter suggests the DOL will join the plaintiff attacks on driver pay.
    • Put your pay rules in writing. Be clear with your rules and what work your pay covers, etc.
  • Exempt v Non-Exempt Employment – independent contractor status gets the headlines, but claims arguing dispatchers, inside sales, customer service reps, recruiters, and so on are non-exempt and entitled to overtime still pop up now and again.
    • Update your job descriptions. Be clear about the discretion your exempt employees enjoy.

Now is the time to get your policies, processes, programs, and much more importantly – your day-to-day execution in order.

Good paperwork is nice, good execution is better

Good paperwork is important on labor and employment issues. You need good independent contractor agreements, clear employee handbooks, fair and compliant policies, and so on. But it is much more important your execution is compliant, fair, reasonable, clear, and consistent.

Inspect what you expect

In addition to the normal document review, take the time to review your processes and execution out on the floor. Do your people know the rules? How are your managers interpreting the rules with their team members? How are your managers managing their team members? No self-audit is complete without time on the floor watching, asking questions, listening, and learning. Doing a robust, honest review of your paper and your execution, and making improvements to both as appropriate will strengthen your business for the DOL’s new old attacks on employment practices.

Good employment practices attract good employees

More importantly, it is clear employees are becoming more and more empowered in the workplace. The battle for quality drivers, quality owner operators, quality technicians, and quality office employees is only intensifying. Having strong employment practices is good for fending off government attacks, but much more importantly, strong employment practices are great for attracting and retaining quality people.

 

The Grawe Group, LLC is a team of experienced executives helping trucking and logistics businesses solve problems, hit goals, and build sustainable success. From legal and risk management matters, to operational, financial, and executive challenges, the Grawe Group has the consulting, management, and legal expertise in trucking and logistics to help you build sustainable success. www.thegrawegroup.com