Trump Executive Agencies Continue to Roll Out Legal Guidance in their Final Days in Office, But How Much Does it Matter?

January 15, 2021

In the final days of the Trump administration, executive agencies continue to take a flurry of actions, issuing new guidance and publishing proposed and final rules that impact employers.

For example, on January 6, 2021, the DOL published the final rule regarding the Fair Labor Standards Act (“FLSA”) test to determine when a worker is an independent contractor.  The rule is important for employers because it triggers whether or not a worker is subject to the minimum wage and overtime rules of the FLSA.  Briefly, the final rule makes clear that the actual practice of the parties, rather than what the contract says or what is theoretically possible, is determinative of whether a worker is an independent contractor.  The rule also affirms that the “economic reality test” (i.e., is the worker actually economically independent from the employer) determines when an individual is an independent contractor or an employee.  It also identifies the “core” factors relevant to the test:  1) the nature and degree of control over the individual’s work and 2) the worker’s opportunity for profit or loss and other guiding factors:  3) the amount of skill required for the work, 4) the duration/degree of permanence of the working relationship between employer and worker, and 5) whether the work is part of an integrated unit of production.  The rule also offers practical examples to help employers understand how the test will be applied.

On January 7, 2021, the Equal Employment Opportunity Commission published a proposed rule on wellness programs under the Americans with Disabilities Act (“ADA”) and the Genetic Information Nondiscrimination Act (“GINA”).  In essence, the rules explain the extent to which employers are allowed to incentivize employees to participate in corporate wellness programs that require the disclosure of medical or genetic information under the ADA and GINA.  The proposed rule can be found here.  The rules were published on January 13 and 14, 2021, respectively, and will become effective 30 days from publication.

Employers who offer wellness programs, or who classify some of their workers as independent contractors should review these rules to ensure that they are in compliance.  With that said, in less than a week, Joe Biden will be inaugurated.  It remains to be seen whether his administration will revise these or other agency rules which became law during the Trump years.  The odds are that there will be at least some changes.  If it is any indicator, Biden just unveiled his coronavirus relief plan which includes a proposed increase to the federal minimum wage from $7.25 to $15/hour and an end to the tipped minimum wage.  We can only hope that this time, government officials will find a compromise so that businesses will be able to operate with some level of stability, instead of having to follow new executive rules on the extreme right or left each time a different political party is elected.  (Remember when different parties controlled Congress and the Presidency, but were still able to pass sweeping legislation like the ADA?)  Such collaboration seems especially important for businesses facing major challenges to simply stay open during a global pandemic.