Yesterday, the EEOC published its four-year Strategic Enforcement Plan for fiscal years 2017 through 2021. The Plan is the Commission’s list of areas of priority where it intends to focus its resources in the next four years. The purpose of the Plan is to identify those areas the Commission believes are likely to have a strategic impact in advancing equal opportunity and freedom from discrimination in the workplace. Strategic impact, to the Commission, means a focus on areas likely to have 1) a significant effect on the development of the law; or 2) on promoting compliance across a large organization, community, or industry. While many of the areas of emphasis have remained the consistent from past Plans, a new strategic priority caught my attention.
Yesterday’s Plan signaled an intent to address issues “related to complex employment relationships and structures in the 21st century workplace, focusing specifically on temporary workers, staffing agencies, independent contractor relationships, and the on-demand economy.” Stated another way, the intends to prioritize investigation of and enforcement of charges that, in its opinion, develop (i.e., expand) the applicability of the anti-discrimination laws reach to these working relationships and that target large employers and industries using alternative working relationships like staffing agencies and independent contractors. This likely means more frequent attempts to hold several companies liable under joint-employer legal theories and challenges to workers’ classification status as independent contractors.
The classification of workers as independent contractor rather than employees has several legal consequences. Not only are independent contractors ineligible for unemployment benefits, overtime and for employer tax withholdings, the laws holding employers liable for discrimination and harassment generally only apply to the employees of employer. The Commission is signaling its intent to challenge independent contractor classifications where an inaccurate classification would deprive the worker of the protections of the civil rights laws.
For years I have recommended in these posts that companies using independent contractors should have those arrangements closely scrutinized by their labor and employment counsel so that adverse benefits, wage and hour and tax consequences can be avoided. The EEOC’s Strategic Enforcement Plan just provides one more reason why those relationships should be closely monitored to ensure workers are properly classified.
You can review the EEOC’s 2017-21 Strategic Enforcement Plan here.
Follow me on Twitter @RussellCawyer.