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Health care registry companies provide matchmaking and
referral services for qualified, pre-screened and vetted home caregivers. They often also provide administrative
services. As part of the “gig economy,”
health care registries often tread a fine line between classifying caregivers
as independent contractors or employers.
On July 13, 2018, the Wage and Hour Division of the
Department of Labor (“DOL”) issued a Field Assistance Bulletin (“FAB”) entitled,
“Determining Whether Nurse or Caregiver Registries are Employers of the Caregiver.” Although the FAB directly relates only to
nurses and caregivers, this is the Trump Administration’s first substantive guidance
on independent contractor classification.
The DOL previously withdrew its 2015 Administrative
Interpretation (“AI”) on independent contracting, but did not replace the AI
with other guidance. Now, the DOL
restates the traditional “economic reality” test for determining independent
contractor status such that it will consider the “totality of the circumstances
to evaluate whether an employment relationship exists” and “will evaluate all
factors…to reach appropriate conclusions in each case.” This indicates a return to historically
important factors, including control of the work performed by the independent
contractor. The FAB discusses specific
business practices for registries that could affect the determination of
whether an employment relationship exists.
The following relevant factors are flagged by the DOL: (1) background
checks; (2) hiring and firing; (3) scheduling and assigning work; (4)
controlling the caregiver’s work; (5) setting the pay rate; (6) continuous
payments for caregiver services; (7) paying wages; (8) tracking caregiver
hours; (9) purchasing equipment and supplies; and (10) receiving Employer
Identification Number (“EIN”) or 1099.
The FAB provides specific guidance on how to structure
independent contractor relationships in the caregiver industry. It also generally signals the DOL’s return to
the traditional, multifactor balancing test to determine independent contractor
status with a primary focus on control of the worker.