SHRM Finds Fault with DOL Worker-Classification Survey

By SHRM Online staff Mar 22, 2013

On March 12, 2013, the Society for Human Resource Management (SHRM) issued comments to the U.S. Department of Labor’s (DOL) wage and hour division, taking issue with the agency’s proposal to survey workers about their knowledge of, and experiences with, worker misclassification.

The data collected during the survey “likely will be used to support DOL’s imposition of additional recordkeeping requirements on employers” to determine if a worker is properly classified as an independent contractor or as exempt from the Fair Labor Standards Act (FLSA) overtime requirements, as previously announced in the DOL’s regulatory agenda, the comments state.

The DOL has said its planned “Right to Know” regulations would revise the FLSA’s recordkeeping regulations to “enhance the transparency and disclosure to workers of their status as the employer’s employee or some other status, such as an independent contractor, and if an employee, how their pay is computed.”

SHRM commented: “Because the planned ‘Right to Know’ regulations would impose significant additional administrative burdens and costs on employers, the survey will have a significant impact on the HR profession. The flawed and untested survey instrument and sampling methodology, if not corrected, will lead to invalid results, which could not be used to support the need for or benefits of additional FLSA recordkeeping and disclosure requirements.”

The comments, delivered by Michael P. Aitken, SHRM vice president for government affairs, specifically state that:

  • The DOL has not sufficiently established the need for conducting a worker-classification survey. SHRM believes that the agency’s views on an alleged lack of disclosure requirements regarding employment status are misguided.

  • The DOL did not provide sufficient time to review the survey instrument and sampling methodology.Because of the difficulty in obtaining copies of the survey and supporting documents and the time required to provide meaningful expert review of the proposed questions and methodology, the original 60-day comment period was “grossly inadequate.”

  • The planned employee sampling size is inadequate. To obtain useful results, the sample needs to include enough completed interviews to enable statistically reliable estimates of items such as correctly vs. incorrectly classified workers, cross-tabulated by relevant respondent characteristics.

  • The survey plan should include a pretesting component. Most of the key questions in the survey have not been used in any previous survey.

  • The survey questionnaire is flawed. Questions throughout the survey, for instance, reflect a bias that assumes the respondent is in fact an employee, would prefer to be an employee and is better off as an employee.

Related Articles:

Paying Contractors in Company Stock, SHRM Online Compensation, March 2013

Misclassified Employees Awarded $1.3 Million, SHRM Online Legal Issues, February 2013

Independent Contractor Classifications Hold Many Risks, SHRM Online Legal Issues, July 2012

Determining Overtime Eligibility in the United States, SHRM Toolkits, December 2011

Experts: Carefully Consider Independent Contractor Classifications, SHRM Online Legal Issues, September 2009

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