If you are a fan of the Los Angeles Chargers football team, you
may have been nervous as a recent Monday Night Football
game between the Broncos and the Chargers entered overtime. While
you may have been concerned about the outcome of the game, you
probably weren't worried about whether the game would be over
in time for you to make it to your side hustle at the NFL Network.
That was Chase Daniel's worry.
Daniel is the backup quarterback for the Chargers. He is also a
post-game commentator for the NFL Network, following every NFL
Monday Night Football game. 1 As a pro football
fan, I'm intrigued by an NFL player who also works the night
shift. As an employment lawyer, I want to know how Daniel is
getting paid for his gig work. And as of a couple of weeks ago, the
U.S. Department of Labor (DOL) might also be interested in this
question.
On October 13, 2022, the DOL released its proposed regulations on
worker classification under the Fair Labor Standards Act (FLSA).
The purpose of the new rules is ostensibly to correct perceived
abuses by companies of the "independent contractor"
status. These newly proposed regulations will clearly make it more
difficult to classify workers as independent contractors rather
than regular employees of the business. Because I have some trouble
turning off my brain, I had to wonder whether Chase Daniel is
working as an "employee" or "independent
contractor" for the NFL Network, and if the latter, whether
his new gig will survive these new regulations?
The prior independent contractor regulations, promulgated by the
Trump Administration, were considered much more employer-friendly.
In contrast, the newly proposed rules endorse a return to what the
DOL describes as a 40-year history of using the regulations to
protect employees from abuse as a result of
misclassification.
One of the biggest differences between the Trump Administration
rules and the Biden Administration rules is that none of the
factors that will now be considered by the DOL will have any
predetermined significance—each factor must be considered in
light of the entire relationship between the worker and the
business (whatever that means).
The six factors the DOL proposes that now be considered to
determine whether someone is truly an independent contractor
include the following: 1) the nature and degree of the worker's
control over the work being performed; 2) the worker's
opportunity for profit or loss in the arrangement; 3) investments
by the worker and the company; 4) the degree of permanence of the
working relationship; 5) the extent to which the work performed is
an integral part of the employer's business; and 6) the degree
of skill and initiative exhibited by the worker. The new
regulations are intended to guide the analysis of whether the
"economic realities of the working relationship" reveal
the person to be economically dependent on the company for work, or
if instead, the person is in business for himself or herself based
on a "totality-of-the-circumstances." Interestingly, the
proposed rules also state that "additional factors may be
relevant" in the analysis, but such other factors are not
fully identified.
In explaining its new approach to analyzing the issues, the DOL
acknowledged several other analytical alternatives that it had
considered but rejected. The DOL made specific reference to what is
known as the "ABC test," under which all workers are
presumed to be "employees" of the company unless the
employer can demonstrate three specific factors that all show the
person is truly an independent contractor. In other words, the DOL
would apparently like you to know that it could have been much
worse, from an employer's perspective. That said, the DOL still
estimates that the new regulations could impact more than 22
million supposedly misclassified contractors/employees.
Nevertheless, the DOL insists that the new proposed rules are very
consistent with pre-Trump Administration rules and will not trigger
a large number of misclassification enforcement actions by the
agency.
For good or bad, Chase Daniel (and the rest of us) will not know
the final outcome of these proposed rules for a while. Originally,
comments on the proposed regulations were due by November 28, 2022.
Based on immediate responses from the business world, the DOL
extended the comment period by 15 days to December 13, 2022. Those
comments must be considered by the DOL before final implementation,
so we should not expect the final rules to go into effect until mid
to late 2023. To close where we started, Chase Daniel's season
with the L.A. Chargers, and his part-time gig with the NFL Network,
will be long over before we have an answer on his employment
status.
Footnotes
1. To read the full story of Chase Daniel's long
Monday night, click this story from SBNation.com:
https://www.sbnation.com/2022/10/18/23410858/chargers-chase-daniel-nfl-network-monday-night-football
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
