3 More Updates on Recent Blog Articles – Part Two

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Three more updates to our recent blog articles are on the following topics: Independent Contractor versus Employee, Recession Outlook (2024), and Litigation Risk Mitigation.

1.) Independent Contractor versus Employee

We have written a couple of times on this important topic with the latest one being on July 12, 2023, with the title “In the Courts Again “Employee Vs.. Independent Contractor”. This blog article was about a court case in Minneapolis, MN where employees were awarded $254,000 in back wages and liquidated damages for having been misclassified as independent contractors. The employer had refused to pay the judgment and the Labor Dept. sued to collect.  Ultimately the government was successful.

 

Update

The update here is not a case where a violation is being found and penalties assessed. It is an update on a California case that goes back to an Assembly Bill 5 (AB5) in California that took away the right of Gig platforms Uber, Lyft and other similarly operating Gig platforms to use the Independent Contractor status (2019). Although the bill passed and became law, the very next year (2020) a California ballot Proposition 22 was passed that rescinded the new law and the gig platforms went back to using that status.

The latest update to this ongoing issue as reported by the San Francisco Chronicle on May 20, 2024 is that the State Supreme Court is going to hear a challenge to Proposition 22on the basis of its constitutionality in depriving the state legislature’s right to grant workman’s compensation and other worker benefits.

As Independent contractors, workers are not entitled to these state benefits. Some believe that it is unlikely that the court would interfere with the standing of the ballot initiative and not overturn the peoples ballot initiatives that are, at least, equal to the power of the state legislature in California.

 

2.) Recession in 2024?

In August of 2023 we wrote a blog article about the possibility of a recession. The title was: “Is the U.S. Headed for a “Soft Landing”? Even though there were some dark clouds and sceptics, there were many voices that were optimistic especially Morgan Stanley who was predicting no recession as early as May 2023.

Soon others joined the chorus, like the Washington Post on July 27 reporting that the recession in housing was already ending and the same day AP was reporting that many “optimistic” economists were predicting that a recession could be avoided even if the Fed kept interest rates high “For months to come”.

And yes, there were others like Bloomberg News, Bank of America, and Wells Fargo who were calling for a “mild recession.”

In December 2023 we reported in a blog article titled: “Economic Forecasts for 2024 – No Recession, But”.  There were a lot of “buts”, and “challenges” by many forecasters, but the bottom line was positive.

Update:

We are now well into 2024 and we are seeing waning growth but still no recession. So, reports The Conference Board who is constantly looking at leading economic indicators and their general opinion at this time is cautious optimism. For example, Consumer Confidence has “ticked up” but only after three months of decline.  CEO confidence is up but only slightly hovering just above the 50-50 mark.

Other leading indicators are slightly negative, but the key word is “slightly”. For example, In the 6 months from October to April the overall LEI decreases were just 1.9%. But the good news, nearly halfway through 2024, the Conference board is predicting no recession

Personally, I have a pretty confident hunch that we need some really good news on the wars in Europe, the Middle East, and Africa.  And, here at home, a healthy election cycles this summer and fall would boost confidence and other LEI’s both at home and worldwide

3.) Litigation Risk Mitigation.

On October 8th 2019 we wrote a blog article titled “Increasing Lawsuits Against Staffing Companies – What is Happening”. In that article we first noted that because of the US Labor Department’s “Temporary Worker Initiative” (TWI) that began with OSHA, and whereby staffing companies began to be held liable  for conditions at their client’s place of business.

This policy introduced the far-reaching principle of “Joint Employers” and extended into many other Labor Department compliance issues for staffing companies.

In that article we explained the logic of the policy being that the staffing company who provided their temp employees to a client’s business, should know of hazardous situations that exist there and take appropriate action to inform and appropriately ensure preventative training for their contract workers. This principle soon spread to other compliance issues beyond OSHA, to “Americans with Disabilities Act, EEOC requirements for discrimination in hiring, etc.

We concluded that article with some serious cautions about being aware of relevant conditions that exist in their clients’ workplaces, reviewing their contract to spell out who is responsible for informing and training workers etc.

Update

In a May 29th issue of SIA’s (Staffing Industry Analysts)  Publication, “Staffing Industry Review” carried an article titled “How to Mitigate 3 Common Litigation Risks?”   (The authors are litigation attorneys)

The 3 methods the authors suggest for mitigating litigation risks are “Mass Arbitration Waivers, Compliance Audits, and Operational Agreement Reviews.

Mass Arbitration Waivers inserted in contracts where arbitration is initially required in a contract and plaintiffs file mass arbitration requests to get around the basic limitation of the arbitration agreement. These waivers can accomplish that, or, at least, mitigate against it.

Compliance Audits are simply a recommendation that companies periodically review certain contract specifications, that are often overlooked, to ensure compliance. Some of these items include Minimum wage requirements, usually where local minimums are above the federal minimum, job postings in need of wage information, Cell Phone reimbursements, and Training time reimbursements.

Operational Agreement Review

Companies should constantly review and take appropriate actions to ensure that payment for services are being kept in order that negative consequences like a cash flow crisis and/or collection litigation, does not happen.

Contact information for the three attorneys who have provided this excellent and free legal advice are located in the linked article above, i.e., “How to Mitigate 3 Common Litigation Risks.

As Always, Stay Safe (Yourself and Your Company!)