Are Placement “Registries” Employers ? A Recent Agency Bulletin Suggests Not, but Caveats Remain

By October 23, 2018 November 28th, 2018 Best Practices, Employment Law, Policies and Procedures

In July 2018, Bryan Jarrett, Acting Administrator of the Department of Labor (DoL), issued Field Assistance Bulletin No. 2018-4 (FAB) to help Wage & Hour Division (WHD) field investigators determine whether home care, nurse, or caregiver registries are employers under the Fair Labor Standards Act (FLSA). Registries aren’t employers – they are “worker matching services,” in this case, matching people who need care giving services with the caregivers who provide them. For this registry, the caregivers were home health aides, nurses, personal care attendants, and other qualified home care workers. To read the entire Field Bulletin, click here.

Although the FAB stopped short of confirming these caregivers could be classified as independent contractors, it also made no comment that indicated they could not. It also confirmed that registries themselves are not employers under the FLSA, noting, “…a registry that simply facilitates matches between clients and caregivers—even if the registry also provides certain other services, such as payroll services—is not an employer…”

The FAB highlights factors that the WHD will scrutinize during investigations—those activities that might cause registries and other referral resources to cross the line to controlling a registrant’s work environment and product. Examples include:

  • Providing clients or workers with “benchmark pay rates” for negotiations does not indicate employer status but designating a set pay range or offering service-specific direction might.
  • Background checks—performing basic checks does not indicate employer status, but interviewing prospective workers or references, or pre-selecting candidates for clients, may indicate employer status.
  • Basic administrative payroll-related functions are fine, but direct payments with registry funds, or independent verification or adjustment of workers’ time records, may cross the line.
  • One-time fees for the matching service, or ongoing charges for administrative functions such as payroll, are acceptable. However, levying a surcharge based on hours or time worked might not be.
  • Being involved in activities that impact “economic realities,” such as hiring and firing, scheduling, performance monitoring, managing licensure, and other functions normally performed by an employer or placement (e.g. “temp”) agency might cause registrants to be classified as workers. (Requiring the registrant to become licensed or bonded was excluded from consideration and is acceptable.)

The guidance comes on the heels of the withdrawal, last year, of DoL Administrator’s Interpretation 2015-1, which held that independent contractor status complaints would be evaluated based on a broad definition of “economic realities.” This further guidance regarding caregivers suggests employers may face fewer federal actions for classifying intermittent or contract workers as independent contractors.

Of course, labor laws and interpretations are constantly in flux, and organizations should seek professional guidance before making employment decisions that could have legal ramifications.