As telehealth companies continue to grow, many physicians and clinicians are classified as 1099 independent contractors—but under federal and state law, they may qualify as W-2 employees. Understanding the difference between these classifications is critical, as it impacts everything from overtime pay and benefits to tax obligations and legal protections. DOL’s Six Economic Reality Factors Many factors can distinguish the status of 1099 and W-2 telehealth providers. Under federal law, treating a W-2 employee as an independent contractor is considered…
[embed]https://youtu.be/Gg9iwJFtK3Q[/embed] What does the new legislation propose, and how does it affect California gig worker misclassification debates under AB5 and Prop 22? California’s Assembly Bill (AB) 1340 and Senate Bill (SB) 371 together are a monumental legislative package that strengthens the labor protections of gig workers. The bills operate within the framework established by Proposition 22, which, passed in 2020, classifies rideshare drivers as independent contractors. This designation precludes them from protections granted to employees, most notably, the right to organize. Supported by both labor unions and rideshare companies, the new legislation aims to grant drivers new protections while largely…
On June 27, 2025, Maryland federal judge J. Mark Coulson denied Perdue Foods' motion to dismiss the claims of seven growers who accused the poultry company of violating the Fair Labor Standards Act (the “FLSA”) by depriving workers of minimum and overtime wages. What Is the Fair Labor Standards Act (FLSA)? The FLSA, which distinguishes nonexempt employees from independent contractors, establishes minimum wage, overtime pay, recordkeeping, and other employment standards…
In a 2-1 decision on Thursday, July 17, 2025, the Fourth Circuit upheld a $9 million judgment against the medical staffing firm Steadfast Medical Staffing (“Steadfast”) for misclassifying more than 1,100 travel nurses as independent contractors, denying them benefits such as overtime pay as a result. The lawsuit is the result of a 2017 investigation by the Department of Labor (“DOL”) which concluded that the nurses should have been classified…
The global telehealth is valued at over $83 billion in 2023 with an expected annual compounding growth rate of 24 percent through 2030, making it one of the largest and fastest growing technology industries in the world. However, with rapid growth comes the possibility of predatory and exploitative business practices. Many telehealth physicians, therapists, and nurse practitioners are classified as independent contractors—but under federal and state law, they may legally…
Expansion of Telehealth Services and Worker Misclassification Risks Since the COVID-19 pandemic, telehealth services expanded nationwide, allowing patients to receive care at reduced costs and allowing providers the ability to use digital platforms to efficiently address the needs of more patients. The rise of telehealth has transformed healthcare delivery, but it has also introduced new risks of worker misclassification. Many telehealth physicians may be improperly classified as independent contractors when…
Senator Bill Cassidy (R- IL) uncovered the Unlocking Benefits for Independent Workers Act to prevent gig worker misclassification. Under this legislation, companies will be able to voluntarily offer portable benefits without employing gig workers and having to pay for unemployment insurance, overtime pay, and workers’ compensation. For some time, there has been a disagreement between labor advocates and large companies like Uber or Lyft over portable benefits. Gig workers have…
What is an Opinion Letter? Opinion letters are official written interpretations by government agencies regarding the application and enforcement of laws and regulations. Since they are written by government personnel, these letters provide an official guideline for the legal application of existing regulations. "Opinion letters are an important tool in ensuring workers and businesses alike have access to clear, practical guidance," said Deputy Secretary of Labor Keith Sonderling. Department of…
On June 1, 2025, a new pay and benefits transparency law created by the New Jersey Department of Labor and Workforce Development took effect, requiring certain employers to comply with enumerated job posting requirements. The goal of the new wage transparency law is to increase workplace transparency and support the New Jersey workforce and employee rights through mandatory salary and benefit disclosures. Which New Jersey employers must comply? Employers that…
DOL Bulletin Resets the Standard for Independent Contractor Misclassification On May 1, 2025, the Wage and Hour Division (WHD) of the U.S. Department of Labor (DOL) issued Field Assistance Bulletin No. 2025-1, which provides new guidance regarding how the WHD is to classify employees and independent contractors under the Fair Labor Standards Act (FLSA). In a Departure from prior guidance impacting independent contractor misclassification, the WHD announced it will no…
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