The DOL Has Brought Back Opinion Letters

During the Obama administration, the DOL stopped providing opinion letters in favor of adopting “Administrator Interpretations.”  But, now they are back.

In January, the DOL reissued 17 previously withdrawn opinion letters; and last week, the U.S. Department of Labor (DOL) issued two opinion letters – the first since 2009.

Opinion letters can be a great benefit to employers.  First, they address specific questions submitted to the DOL by employers and provide important compliance guidance.  It is essentially the DOL and Wage and Hour Division (WHD) providing employers with guidance on how they believe employers should be complying with the laws.

Second, opinion letters can provide an affirmative defense to employers in litigation. In order to take advantage of the affirmative defense, the opinion letter must fully outline the facts involved in its opinions and explain and justify its interpretations.  The employer must also show that their acts conformed with opinion letter’s guidance.

So What Do These Opinion Letters Say?

The first letter addresses whether a request for FMLA that includes a 15-minute break provided each hour due to a continuing a serious health condition, must be paid.  The DOL noted that although short rest breaks up to 20 minutes in length are ordinarily compensable, because the FMLA-protected breaks are given to accommodate the
employee’s serious health condition, the breaks predominantly benefit the employee and need not be paid.  The DOL concluded that employees covered by the FMLA must, however, receive the same number of paid breaks as their peers.

In the second letter, the Wage and Hour Division (WHD) addressed travel time for non-exempt employees who travel on the weekend.  The letter focuses on how to determine travel time pay for employees who have no regular work schedule.

Links to the DOL’s new opinion letters are located here and here.

Wisconsin Further Confines Employers’ Use of Restrictive Covenants, including Non-Solicitation Agreements

Employers operating in Wisconsin are likely familiar with Wisconsin’s restrictive covenant statute which is quite…well…restrictive on employers.  While the statute has been in place for decades, a recent decision by the Wisconsin Supreme Court places even further limitations on the language and circumstances of these agreements.


Under Wisconsin law, an agreement by an employee to “not compete with his or her employer” during or after employment is only enforceable “if the restrictions imposed are reasonably necessary for the protection of the employer or principal.”  And, any covenant that imposes an “unreasonable restraint” is void, even portions that would otherwise be legal.

For decades, a five-part test has been used by the Wisconsin courts to determine whether a restrictive covenant is reasonable.  To be reasonable, the restraint must:

  1. Be necessary for the protection of the employer;
  2. Provide a reasonable time limit;
  3. Provide a reasonable territorial limit;
  4. Not be harsh or oppressive as to the employee; and
  5. Not be contrary to public policy

Extension of the Law to Non-Solicitation Agreements

In Manitowoc Co. v Lanning,[1] the court reviewed not a noncompete agreement, but a non-solicitation agreement.  Lanning’s employment agreement contained the following:  “I agree that…for a period of two years from the date [of termination], I will not (either directly or indirectly) solicit, induce or encourage any employee(s) to terminate their employment…or to accept employment with any competitor, supplier or customer…”

In Lanning, the Wisconsin Supreme Court first reviewed whether Wisconsin’s restrictive covenant statute extends beyond non-compete agreements to non-solicitation agreements, or non-solicitation of employees.  Because the statute indicates that “any covenant” that imposes an unreasonable restraint is invalid, the Court reasoned for the first time that a non-solicitation agreement would be subject to the law.  The Court then applied the five-factor test outlined above and determined that the agreement was unreasonable and, as a result, wholly unenforceable.  In particular the Court found the use of the term “any and all employees” of the 13,000 member company overly broad. The $1 million award was vacated, which alleged Lanning had recruited 9 employees to his new employer.

What Should You Do in the Wake of Lanning?

  • If you operate in the state of Wisconsin and you utilize restrictive covenants, carefully review the language of your existing agreements. It is likely they will not comply with the narrow non-solicitation analysis the Court employed.
  • Updating agreements with current employees to be binding post Lanning is tricky: changes must be backed by consideration — each party must give something and get something.
  • Consider the interests your company must necessarily protect and ensure the restrictive language is tailored, specifically to the employee, to address those interests. Even agreements that contain limits on time and territory could be deemed unnecessary for the protection of the employer.  For example, Lanning’s agreement was found to be unreasonably restrictive because it prohibited him from recruiting any and all employees and was not limited to a specific group of employees.
  • Remember: you do not have to abandon valuable restrictive covenants and non-solicitation agreements altogether. Agreements personalized to your company’s needs, the employee, and the Wisconsin law can be valid and useful protections.

We stand ready to help you evaluate, update, and re-execute your restrictive covenants.  We can be reached at or 844-204-0505.

[1] 2018 WI 6

Leave Under the ADA Not a Guarantee

The Americans with Disabilities Act (ADA) Is Not a Leave Act, Or Is It?


This week the US Supreme Court let stand a decision from America’s heartland that has been closely watched. The Severson case arose from an employee with a back issue who had surgery at the end of his FMLA leave and was unable to return to work for another three months.  He was terminated. Severson sued, claiming his rights under the ADA were violated when he was not allowed extra leave.  The Seventh Circuit US Court of Appeals which covers Illinois, Indiana and Wisconsin disagreed. The Court found that ADA is an anti-discrimination statute, not a medical leave law.


What does this mean for employers? The Circuit Courts are split and a ruling from the Supreme Court would have been helpful. Unless and until that occurs, we recommend employers continue to utilize a case by case analysis in determining if leave is a reasonable accommodation under the ADA.  The interactive process with the employee and analysis of undue burden is the best practice for each instance. The trend favoring employees in these cases may be waning, but the risks in denying accommodation across the board are tremendous. Stay the course: treat the ADA as proscribed by law.


If you have any questions on ADA and FMLA leaves, please contact us.  It can be tricky business.



WWYLD – 4/10/18 – The DOL’s New Approach for Tip Pooling

Just a few days ago, the Department of Labor (“DOL”) issued a bulletin that speaks to the DOL’s changed position with regard tip pooling.  As readers with tipped employees know, tip pooling is the practice of sharing tips amongst employees.

Historically, the Fair Labor Standards Act (“FLSA”) stated that tip pooling was only permissible if:

  • Employees were paid below minimum wage; and
  • Employers claimed a tip credit; and
  • The tips were distributed only to “customarily and regularly” tipped employees

But, in July of 2017, the DOL indicated that it would not enforce its regulations prohibiting tip pooling amongst employees who are paid minimum wage.  The DOL indicated this non-enforcement policy would be taken while new regulations were drafted and adopted.  In late March 2018, Congress amended the language of the FLSA to align with the DOL’s position.

As part of the Consolidated Appropriations Act, 2018, Congress amended the FLSA so that it is now permissible to pool tips among employees, even if those employees’ hourly wages meet or exceed the federal minimum wage.  The amendment also allows for non-customarily tipped employees, like cooks and dishwashers, to participate in tip pooling.  Managers and supervisors remain barred from accepting tips or participating in tip pools. 

Note that this addresses changes to federal law only.  Some states have state-specific laws related to tipped employees.  Depending on the state(s) in which you operate, you’ll need to ensure you’re complying with your state’s law.

With that background, let’s turn to a related WWYLD question.

Question:  We run a small restaurant with few employees.  We keep our overhead costs low so that we can provide the highest quality food to our customers.  I’m the owner, but also the chef and the manager.  I sometimes serve customers as well.  Because we share duties, can we share tips? 

Answer:  Some of your employees may be able to share tips, but as the owner/manager, you are prohibited from participating in a tip pool.  The DOL has stated that any individual who meets the following criteria is a “manager” or “supervisor” and cannot participate in a tip pool:

  • An individual whose primary duty is management of the enterprise;
  • An individual who customarily and regularly directs the work of two or more other employees; and
  • An individual who has influence over or authority to hire/fire/promote other employees.

Though you are prohibited from participating in a tip pool, you could consider implementing a “house” or “administrative” charge.  Generally, these charges are set percentages that are automatically added to a customer’s bill.  The funds from these charges can be used for multiple purposes, but are often used to supplement the wages of employees otherwise prohibited from receiving tips/participating in tip pools.  Courts have found that such charges are permissible so long as customers clearly understand that the charges do not equate to a tip.

WWYLD 4/5/18 – Is the Worker an Independent Contractor or Employee?

Yesterday, Tim Kenneally wrote about the interaction of the federal and state laws.  As Tim explained, anytime both federal and state laws apply, the law that affords the employee the most protection is the law that controls.  In Tim’s blog, the applicable laws addressed exempt versus non-exempt classifications.  But, there are many, many situations in which federal and state laws differ, including leaves of absence, overtime, meals & breaks, COBRA, final pay, and workers’ compensation.  It’s the employer’s obligation to know which laws apply; and, it can be daunting.

A recent question about independent contract classification provides another great example of federal and state laws interacting.  The Federal DOL recently retracted some Obama-era guidance that had employers erring on the side of caution and categorizing workers as employees.  But, many states have state-specific laws with regard to independent contractor classification.  In today’s example, we review two states:  Wisconsin and Massachusetts.  You don’t operate in either state?  I urge you to read on nonetheless as the concept remains important:  many states have tests that limit the classification of a worker as an independent contract.

Question:  Are there some rules that outline what it means to be a contractor versus an employee? Are there guidelines for what a contractor is/is not and what an employee is/ is not?

Determination of the working relationship is a pretty hot topic right now.  Some big-name companies like FedEx, Amazon, and Uber have been sued for alleged improper classification of individuals as independent contractors.  Unfortunately for our purposes, most of these cases have either settled (so, we don’t know how a court would rule), been dismissed on technicalities, or remain unresolved.  To add complexity, in 2015 and 2016 the Department of Labor provided some specific guidance on independent contractors.  But, just a few months ago that guidance was retracted by the current administration.  This is all to say that it’s not a straightforward answer.  Each relationship should be assessed on a situation by situation basis.

Federal Law
At a federal level, both the Department of Labor (DOL) and the Internal Revenue Service (IRS) provide rules for determining the worker’s relationship.


The Department of Labor uses the Fair Labor Standards Act (FLSA) definition of employ very broadly to include “to suffer or permit to work.” This is one of the broadest definitions of employment under the law. When applying the FLSA’s vague definition, workers who are economically dependent upon the business of the employer, regardless of skill level, are considered to be employees, and most workers could be employees.  On the other hand, independent contractors are workers with economic independence who are in business for themselves. There are a number of “economic realities” factors that guide the DOL’s assessment of whether an individual should be appropriately classified as an independent contractor. Permanency of the relationship; control; and whether the services rendered are part of the principal’s business are some of the factors.


Three categories are relevant in determining whether the individual would be more appropriately categorized as an employee or independent contractor by the IRS:

  • Behavioral: Does the company control or have the right to control what the worker does and how the worker does his or her job?  Greater company control indicates an employer/employee relationship
  • Financial: Are the business aspects of the worker’s job controlled by the payer (these include things like how worker is paid, whether expenses are reimbursed, who provides tools/supplies, etc.)?  Greater payer control indicates an employer/employee relationship
  • Type of Relationship:
    • Are there written contracts or employee type benefits (i.e. pension plan, insurance, vacation pay, etc.)?  Such things would indicate an employer/employee relationship
    • Will the relationship continue?  An ongoing relationship would indicate an employer/employee relationship
    • Is the work performed a key aspect of the business?  If the individual is performing work that is a key aspect of the business, an employee/employer relationship may be more appropriate.  For example, if a landscape company needs lawnmowing, the individual doing the mowing would be an employee.  But, if the owner of several retail shops needs someone to mow the lawns outside the shops, they would hire the mower as an independent contractor, not an employee.  This is because the landscape company is in the business of maintaining lawns.  But, the retails shops are in the retail business, not the lawnmowing business.

The guidance tells us that all of the above factors should be considered:  “There is no magic or set number of factors that makes the worker an employee or an independent contractor, and no one factor stands alone in making this determination. Also, factors which are relevant in one situation may not be relevant in another.  The key is to look at the entire relationship, consider the degree or extent of the right to direct and control, and finally, to document each of the factors used in coming up with the determination.”

The 3-category analysis is used now rather than the 20-factor test employed by the IRS for many years.

Unlike the federal law’s broad reliance on any number of factors, Wisconsin gives us specifics.  Under WI law, to be properly classified as an independent contractor, all nine of the following factors must be met.  The individual must:

  1. Maintain a separate business
  2. Obtain a Federal Employer Identification Number or has filed business or self-employment income tax returns with the IRS based on the work or service in the previous year.
  3. Operate under specific contracts
  4. Be responsible for operating expenses under the contract
  5. Be responsible for satisfactory performance of the work under the contracts
  6. Be paid per contract, per job, by commission or by competitive bid
  7. Be subject to profit or loss in performing the work under the contracts
  8. Have recurring business liabilities and obligations
  9. Be in a position to succeed or fail if business expenses exceed income


The WI department of workforce development provides concise descriptions of each factor and also provides links to cases that further explain the factors.  The information is available here:

Massachusetts favors the employee status and uses a three prong-test.  To be classified as an independent contractor, all three parts must be answered with a “yes.”  If any one part is “no,” the individual should be categorized as an employee.

  1. Is the worker free from the Company’s control and direction in performing the service both under a contract and in fact?  To be free from an employer’s direction and control, a worker’s activities and duties must actually be carried out with independence and autonomy.  For example, an independent contractor completes the job using his or her own approach without instruction and also dictates the hours that he or she will work on the job.
  2. Does the worker provide a service that is outside the Company’s usual course of business?  Typically, a worker who performs the same type of work that is part of the normal service delivered by the employer may not be treated as an independent contractor.
  3. Is the worker customarily engaged in an independent trade, occupation or profession?  The particular service to be performed must be “similar in nature” to the independently established trade of the worker.  An independent contractor must represent his or herself to the public as “being in business” to perform the same or similar services that he or she is performing for the company.

Let’s Summarize:

  • Each time you form a working relationship, perform an individualized assessment of the relationship.
  • Consider the factors outlined by both federal and state laws.
  • The law that affords the most protections to the worker applies. Here, that would mean that if the worker would be categorized as an employee under either federal or state law, the worker must be categorized as an employee.
  • If you have questions on how to classify workers, we can help. We offer a Position Classification Audit service to identify potential pitfalls of independent contractors and wage and hour issues. It is an efficient and easy way to protect your business. If you would like more information about this service or any other questions, please contact (508) 548-4888 or

Another Noteworthy Wage and Hour Law Development

By Timothy G. Kenneally, Esquire

A business owner from Texas, we’ll call him George, posed this question, “Why is a Texas-based business required to provide a 30-minute meal break to certain company employees working shifts of more than 6 hours in Massachusetts, when no such breaks are required in the company’s home state of Texas?” The response to this inquiry seemed clear – Massachusetts wage and hour laws apply to employees working in Massachusetts. However, George pressed on, “I looked at the Fair Labor Standards Act (FLSA), he said, and it does not require a meal break.  Why doesn’t the federal law trump Massachusetts?”   The answer – many states throughout the country have state specific wage and hour laws in place. When state and federal laws address the same topic, the law that provides the greater benefit to the employee prevails.

Just this week, we saw an example of an important United States Supreme Court (Supreme Court) decision that will impact thousands of automobile dealerships in states across the country, and yet that decision will not change anything in Massachusetts.

The Supreme Court’s April 2, 2018 decision in Encino Motorcars, LLC v Navarro, et al. was heard loud and clear over the din of service departments in automobile dealerships throughout the United States.  The issue: whether Encino Motorcars violated the FLSA by failing to pay overtime wages to service advisors who regularly worked more than forty (40) hours in a week.  The answer: NO.

Encino Motorcars claimed that its service advisors were exempt from the FLSA’s overtime-pay requirement under 29 U. S. C. §213(b)(10)(A), which states : “[A]ny salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles, trucks, or farm implements, if he is employed by a nonmanufacturing establishment primarily engaged in the business of selling such vehicles or implements to ultimate purchasers” is exempt from the overtime wages requirement of the law (the 10A exemption).  The Court of Appeals for the Ninth Circuit had ruled that the 10A exemption did not apply to service advisors who did not perform any work on the vehicles for the dealership, and that the service advisors were entitled to overtime.  Following a close vote (5-4), the Supreme Court overruled that decision reasoning:

[S]ervice advisors are ‘salesm[e]n . . . primarily engaged in . . . servicing automobiles,’ [and are therefore] exempt from the FLSA’s overtime-pay requirement…Service advisors are also ‘primarily engaged in . . . servicing automobiles.’ ‘Servicing’ can mean either ‘the action of maintaining or repairing a motor vehicle’ or ‘[t]he action of providing a service.’ Service advisors satisfy both definitions because they are integral to the servicing process.

Of import, the impact of the Supreme Court’s decision is limited to the FLSA, which is the federal wage and hour law.  For those jurisdictions with state overtime laws that do not adopt or mirror the FLSA, employees may remain eligible for overtime even where they are exempt under the FLSA.  In jurisdictions that do not include the 10A exemption (or similar language) within their overtime law, for example Massachusetts, service advisors remain eligible for overtime compensation under state wage and hour laws.

State wage and hour laws and exempt classification do not always follow federal law, and can result in costly damages in the event of an audit or lawsuit.  We recommend that employers review their employee job descriptions and applicable law to determine whether their employees are properly classified.

Our recent blog entry regarding the new PAID law ( presents another example of a federal regulation that employers would be wise to know and understand, while also comparing that law to the laws of their state.  Please also check out for more information on the services we provide. We are here to help.

FMLA and Caring for Aging Parents

A client posed a variation on the following question to me:

“I have an employee whose father is going in for surgery.  She has requested FMLA leave, and I understand his surgery would be considered a serious health condition.  However, she has a mother and sister who are also available to care for her father.  Are we required to grant FMLA when there are two other caretakers available, who will be providing the primary care?”

The FMLA regulations provide that eligible employees may take leave when the employee is needed to care for certain qualifying family members (child, spouse or parent) with a serious health condition.

The FMLA does not require that the employee be the primary caretaker for the qualifying family member.  Further, the employee does not have to be the only individual or family member available to care for the qualifying family member.  The employee need only provide a certification from the healthcare provider that includes a statement that the employee is “needed to care for” the qualifying family member.

According to the FMLA regulations, “needed to care for” may encompass both physical and psychological care.  For example, it includes situations where, because of the serious health condition, the family member is unable to care for his or her own basic medical, hygienic, or nutritional needs or is unable to transport him or herself to the doctor.

It also includes situations where the employee is needed to provide “psychological comfort and reassurance” for a parent who is receiving inpatient or home care and where the employee may be needed to substitute for others who normally care for the qualifying family member.

FMLA Is Not Limited to Parents, Spouses, and Children

It should be noted that the definition of child includes individuals for whom the employee stood or is standing “in loco parentis,” and the definition of parent includes individuals who stood “in loco parentis” to the employee.

In the case of an employee seeking leave to care for an aging family member, employers should not immediately dismiss a request for leave to care for a grandparent, aunt or uncle, or even a family friend.  In loco parentis refers to a relationship where one person assumes and discharges the obligations of a parent to a child, and does not require a biological relationship. The in loco parentis relationship exists when an individual intends to take on the role of a parent to a child who is under 18 (or 18 years or older and incapable of self-care because of a mental or physical disability).

Under the FMLA, to qualify as in loco parentis the person must have day-to-day responsibilities to care for or financially support a child. Applicable factors include:
• The age of the child;
• The degree to which the child is dependent on the person;
• The amount of financial support, if any, provided; and
• The extent to which duties commonly associated with parenthood are exercised

Based on the above, there may be circumstances where an employee will be eligible to take FMLA to care for an aging family member or friend who is not a parent.





WWYLD – 03/28/18 – Early Termination of COBRA Coverage

In this week’s “What Would Your Lawyer Do” post, we take on a continuation of healthcare coverage, or “COBRA,” issue.  Generally, an individual may be entitled to COBRA for a maximum of either 18 or 36 months, depending on the nature of the basis for entitlement (the “qualifying event”).  But, coverage can be terminated before that 18 or 36-month mark in certain situations.  That’s the topic of this week’s WWYLD.

Question:  A former employee reached out to say that his new employer’s benefits are not as comprehensive as ours.  So, although he’s eligible for benefits at his new employer, he’d prefer to stay on our plan via COBRA.  Can he do that?  In general, when can we terminate an employee’s COBRA?

To be able to terminate COBRA coverage before the maximum coverage period is reached, both the law and the plan must allow it.

Under COBRA, coverage may be terminated before the maximum coverage period is reached if:

  • The employer ceases to maintain any group health plan;
  • Premiums are not paid in full on a timely basis;
  • A qualified beneficiary begins coverage under another group health plan after electing continuation coverage;
  • A qualified beneficiary becomes entitled to Medicare benefits after electing continuation coverage; or
  • A qualified beneficiary engages in conduct that would justify the plan in terminating coverage of a similarly situated participant or beneficiary not receiving continuation coverage (such as fraud).

To address the current situation:  the law states that, to terminate coverage early, the former employee must be “covered” under another plan.  The determining factor is actual coverage, not entitlement.  In this case, the employee’s COBRA benefits cannot be terminated early because he has not enrolled in the new employer’s benefits and, therefore, he is not covered by the new employer’s plan.  Because the law prohibits early termination, the terms of the plan don’t come into play.

But, you ask about other situations in which you can terminate COBRA early.  Let’s do some hypotheticals.

Hypothetical #1:  A former employee elected COBRA and then elected the new employer’s coverage.  The employee wants to remain on the COBRA plan as well.  Can he?  We know from the information above that the law states the former employer can terminate COBRA in this situation.  So, the answer hinges on the terms of the plan document.  Most plan documents have a section that directly and specifically addresses COBRA.  Investigate the contents of your plan document, or work with your agent to understand the COBRA-related terms.  If the plan document is silent, the former employer could not terminate COBRA coverage early. The employee could have coverage under both the new and former employer (messy as that might be for the employee).  But, if the plan document specified that coverage terminates early upon election of coverage with the new employer, COBRA could be terminated early.

Hypothetical #2:  A former employee elected COBRA and then became entitled to Medicare.  The plan document states that coverage is terminated upon entitlement to, and election of, Medicare.  Can coverage be terminated early?  The law states that the former employer can terminate COBRA early when the employee becomes entitled to Medicare.  The determining factor is entitlement to Medicare, not coverage.  But, the plan document indicates that the employee must be enrolled in Meidicare before COBRA terminates.  Because the plan document is more restrictive than the law, the plan document controls.

Note, too, that some states have state-specific COBRA laws, often called “mini-COBRA.”  A mini-COBRA may provide more employee protections than the federal law alone.  For example, an employer in Massachusetts cannot terminate COBRA early even if the employee actually signs up for coverage under a new group health plan if that plan would not cover the employee’s pre-existing condition.

Questions about COBRA?  We can help.

When Employee Performance/Discipline and Disability Accommodation Are Involved, Documentation is Everything.

Under the law, the Americans with Disabilities Act requires employers to engage in what is called the interactive dialogue with any employee who requests accommodation for a disability. However, in reality, the ADA rarely (if ever) appears in the workplace when an employee proactively states: “I need accommodation for my recognized disability!”

It is far more common for HR to hear rumors about an employee’s medical condition months after the employee’s supervisor began informally accommodating the employee by allowing him or her to leave work to attend appointments, or an employee with known performance problems is disciplined and in turn blames the problems on a mental or physical health condition.

Unfortunately, when a disability is present or even suspected, terminating or demoting an employee once the issue of a potential disability has been raised can be a tricky process.  At the same time, performance issues should not be ignored. In fact, the opposite is true.  Performance issues should always be carefully documented and placed in employee files.  This documentation creates a record that will offer employers protection in the event that a discrimination claim is made.

By documenting performance problems in real time, you can avoid a situation where:

  1. The supervisor gets fed up with an employee’s poor performance or the accommodation that had been informally in place;
  2. The supervisor decides to terminate; and
  3. The employee claims he or she had no history of performance issues and is being discriminated against.

What, how and when to document matter.  We can help–contact us at 508.548.4888 or






WWYLD – 03/20/18 – Is There a Timeline for “Temporary?”

A few weeks ago, Angela Snyder wrote about the DOL’s new guidance regarding interns. In her article, Angela discussed considerations related to intern pay. Another issue that often arises with regard to interns is employment status—should the intern be hired as a “regular” or “temporary” employee? That’s the topic of this week’s WWYLD.

Question: Our handbook indicates that a “temporary” employee is someone who works for the organization for three months or less. A manager has asked if we can hire an employee on a temporary basis for a 4-month engagement. Are there any legal restrictions on what constitutes “temporary” employment?

In general, “temporary” is defined by the employer not the law. Legally, employees are “at will” (which means employment can be terminated at any time by either the employer or the employee) unless a contract or agreement assures otherwise.  A temporary status or probationary period does not affect the at will status.  But, there are other legal considerations for temporary employees. Let’s start there and finish with some operational considerations.

The Affordable Care Act (“ACA”): Many employers have policies that state that certain benefits, including health insurance, are not made available to temporary employees. The ACA requires that employers (with 50 or more employees) offer health insurance that is affordable and provides minimum value to their full-time employees. The ACA states that a waiting period of up to 90 days is permissible. Therefore, if a full-time (defined as working 30 or more hours/week), temporary employee remains employed beyond 90 days, he or she is legally entitled to benefits, regardless of company policy. This is one reason many employers limit temporary employment to three months or less.

Title VII: It is lawful and nondiscriminatory to provide different benefits and privileges to different employees based on employment status (regular vs. temporary, exempt vs. non-exempt, full-time vs. part-time). But an employer could open itself up to claims of discrimination if employees doing similar jobs are categorized differently and, therefore, receive different benefits and privileges. Let’s say, for example, that employee A and employee B have the same job title and both have 6-months of tenure. Employee A is “regular” and employee B is “temporary.” The employer only provides benefits to regular employees with at least 90 days of tenure. Employee B could assert a claim that he is being retained at the temporary status to avoid providing benefits, and this is an adverse action that relates to the employee’s membership in a protected class. Again, this is not to say that temporary employment, or that providing different benefits to temporary employees, is unlawful or discriminatory. Employers must ensure they have legitimate non-discriminatory business reasons for classifying employees as they do.

Operational Considerations:

  • Ensure you have well-documented policies regarding temporary employees. Consistently apply the policy.
  • Ensure you have well-written job descriptions that clearly outline the duration of the specific assignment.
  • Before the job is posted, clearly document the business need for hiring an employee on a temporary, rather than regular, basis.
  • Monitor the duration of the assignment to ensure it aligns with policy and the job description. Where the assignment goes beyond the scope of the policy/job description, consider changing the employment status—moving to regular employment or moving to termination.
  • Monitor the hours worked to ensure compliance with the ACA.


Questions about employment status? Please reach out.