Paul DeCamp Quoted in “DOL's Wage & Hour Regulatory Seesaw Continued in 2022”

The U.S. Department of Labor in 2022 pushed to expand the Fair Labor Standards Act's reach through an employee-friendly independent contractor proposal and fought to increase federal contract workers' pay, but these administrative efforts to tackle wage rights face continued legal battles.

The DOL is attempting to give the Davis-Bacon Act, which governs prevailing wages for public works projects over $2,000, its first rulemaking overhaul in decades. Proposed in March, the rule would overhaul how prevailing wages are calculated. This major undertaking comes amid an ongoing legal challenge to another DOL rule in the federal contracting space: an increase in the minimum wage for contract workers to $15.

That pay bump — and the effort by outdoor recreation companies to shut it down — represents one facet of the continued push to boost workers' wages where possible considering it's clear that a federal increase to the minimum wage is unattainable even as states, cities and even employers go beyond $15 an hour.

But such minimum wage protections are only available to workers considered employees under the FLSA, underscoring the importance of the proposed rule the DOL issued in October that would make it harder for employers to classify workers as independent contractors.

These circumstances — new rulemaking coupled with litigation challenging such rulemaking — is a window into understanding developments at the DOL, said Paul DeCamp, a former administrator for the DOL's Wage and Hour Division and a member of management-side firm Epstein Becker Green.

"It's actually helpful to think about the regulations that the department issued, of course, and the proposed rules the department has issued," he said, "but also to keep in mind earlier actions that are playing out in the courts now." …

Minimum Wage Hike Through Executive Action

In February, the Tenth Circuit temporarily blocked the Biden administration from enforcing an increase to the federal contractor minimum wage to $15 an hour for seasonal recreational companies working on federal land. …

DeCamp said this is an interesting case because it shows the Biden administration's "multifaceted approach" to tackling minimum wage concerns.

"If they don't have the votes in Congress to amend the FLSA to increase the minimum wage, one approach they take is to do it through executive order and through regulations to try to address at least the minimum wage for the federal contractor community," he said. …

The Procurement Act gives the president the power to develop policies around federal procurement.

This case, like others challenging DOL rulemaking, raises questions about the department's authority, DeCamp said.

"One of the main arguments that the challengers to that regulation make is that while the federal acquisition statutes may give the president the authority to address the terms of the contracts by which they procure goods and services," he said, "they don't allow the president and by extension, the Department of Labor, to control the wages that the parties to those contracts pay to their workers."

The Tenth Circuit held oral arguments in the case in September.

Another Swing at Defining Independent Contractors …

The proposed rule, known as Employee or Independent Contractor Classification Under the Fair Labor Standards Act, establishes a nonexhaustive six-factor economic realities test for determining whether a worker is an employee or independent contractor.

The regulation would also rescind a Trump-era rule that worker advocates said made it easier to classify workers as independent contractors by focusing on a worker's opportunity for profit or loss and the degree of control the worker has over their work. …

Decisions in independent contractor litigation often read like mystery novels because you don't know until the end how the court will land, DeCamp said.

"It's the nature of the fact that it's so difficult, at least in some of these gray area spaces, to define and to articulate in words, a standard for differentiating between the kind of relationship for which we want the federal wage and hour laws to apply," he said, "and the kind of relationship for which we don't. That's proved elusive."