Rubio to Acosta: Labor Dept. Must Halt Obama-Era Enforcement

A key Senate ally of the labor secretary is now turning up the pressure on the Labor Department to abandon Obama-era enforcement strategies that the agency has reportedly not reversed.

Sen. Marco Rubio (R-Fla.) wrote to Labor Secretary Alexander Acosta Feb. 5 to express “strong concerns” after hearing reports that investigators still apply the prior administration’s guidance on joint employment and independent contractor misclassification, even after the secretary withdrew those guidance documents last year.

The department in June announced that it had withdrawn a pair of administrator interpretations. Former Wage and Hour Division chief David Weil explained in one document that most workers should be classified as employees, rather than independent contractors, for minimum wage and overtime eligibility purposes. He said in the other document that joint employer liability for affiliated businesses in wage cases should be read broadly.

But as the Trump-appointed pick to replace Weil awaits Senate confirmation, the DOL has yet to replace those guidance memos with new instructions for the some 1,000 WHD field investigators scattered across the country. The Weil memos were seen by the Obama administration as providing clarity on existing statutes, meaning they would reflect the agency’s enforcement posture regardless of who is in the White House. But critics said they were regulations in disguise and created tremendous uncertainty for businesses on when they are liable for affiliated companies’ wage violations and when they could classify workers as independent contractors, who lack access to employer-provided benefits.

Industry Concerns Cited

Rubio cited the concerns of home-care registries, an industry primarily based in Florida that competes with traditional home health agencies in providing in-home care for the elderly and disabled populations. The registry business operates on a 1099 independent contractor model, whereas home health companies typically employ their aides directly.

The senator, who has ties to the secretary from his time as a U.S. Attorney in the Miami area, requested that Acosta “provide additional direction to all divisions of the department outlining the provisions of the withdrawn guidance” and “that you examine enforcements and investigations related to these matters since June 2017.”

Rubio’s letter comes seven months after a coalition of home-care registries, mostly from Florida, asked the DOL’s Wage and Hour Division June 30 to suspend open cases alleging the industry misclassified employers as independent contractors. The letter asked the Wage and Hour Division to issue a new policy statement that clarifies how the industry can continue to classify workers as independent contractors, rather than employees, and remain exempt from minimum wage and overtime laws.

The registries say they are structured as intermediaries that refer the elderly and disabled populations to available in-home caregivers, allowing workers the flexibility to set employment conditions with their clients.

Former WHD officials say major new policy stances would typically not be issued until a Senate-confirmed agency head arrives. Cheryl Stanton, who was nominated for the post last summer, has advanced past a Senate committee but has yet to receive a vote on the Senate floor.

“The Department has received Senator Rubio’s letter to Secretary Acosta and looks forward to responding directly,” a DOL spokesman told Bloomberg Law.