Q&A: managing the employment relationship in the USA (District of Columbia)

Employment relationship

What state-specific laws govern the employment relationship?

Title 32 of the D.C. Code covers Labor and includes the laws on wage payment, minimum wage, and overtime. The DC Human Rights Act (DCHRA), D.C. Code §§ 2-1401.01 to 2-1411.06, also governs the employment relationship.

Who do these cover, including categories of workers?

D.C.’s wage payment, minimum wage, and overtime apply to all D.C. employers. Some employees are exempt from minimum wage and overtime, including executive, administrative, and professional employees.

The DCHRA also applies to all D.C. employers and prohibits discrimination by reason of race, color, religion, national origin, sex, age, marital status, personal appearance, sexual orientation, gender identity or expression, familial status, family responsibilities, matriculation, political affiliation, genetic information, disability, source of income, status as a victim of an intrafamily offense, place of residence or business, and status as a victim or family member of a victim of domestic violence, a sexual offense, or stalking.

Are there state-specific rules regarding employee/contractor misclassification?

D.C. does not have a set statutory definition of an independent contractor. Instead, common law tests are applied, with the outcome depending on the facts of the situation. Courts have emphasized the following four factors in determining whether an individual is an employee or independent contractor: “(1) the selection and engagement of the individual hired, (2) the payment of wages, (3) the power of the one who hires over the other whom he has hired, and (4) whether the service performed by the person hired is a part of the regular business of the one who hired.” No single factor is determinative, and “the decisive test is whether the employer has the right to control and direct the [individual] in the performance of his work and the manner in which the work is to be done.” Courts look to the actual relationship between the parties as well as the language of any agreements between them. Hickey v. Bomers, 28 A.3d 1119, 1123 (D.C. 2011).

In the construction industry, D.C.’s Workplace Fraud Act requires employers to classify workers as employees, rather than independent contractors, in most circumstances. To classify a worker as an independent contractor, the employer must demonstrate that the worker is either “exempt” or meets the statutory exemption. A worker is “exempt” if they perform services in a personal capacity, free from direction and control over the means and manner of providing the services; furnish the necessary tools and equipment; and operate a business considered inseparable from the individual for tax purposes. D.C. Code § 32-1331.01. The statute also allows an employer to classify a worker as an independent contractor if the worker is free from the employer’s direction and control over the performance of services, is customarily engaged in an independently established trade or occupation, and that their work is outside of the usual course of business of the employer. D.C. Code § 32-1331.04.

Must an employment contract be in writing?

Not necessarily, though D.C. courts will not enforce employment contracts that violate the statute of frauds (i.e., oral employment contracts that cannot be performed in one year).

Are any terms implied into employment contracts?

D.C. implies a duty of good faith and fair dealing into all contracts, meaning “neither party shall do anything which will have the effect of destroying or injuring the right of the other party to receive the fruits of the contract.” A claim for breach of this duty cannot be sustained by an at-will employee because there is no contract to provide the basis for the duty. Paul v. Howard Univ., 754 A.2d 297, 310 (D.C. 2000).

Are mandatory arbitration agreements enforceable?

In the employment context, yes, though both parties must have “the distinct intention to be bound.” Therefore, mere continuation of one’s job after the employer issues an arbitration policy is not sufficient to indicate mutual assent, even where the employer requests signature of the agreement and states continued employment will evidence an intent to be bound. Jin v. Parsons Corp., 366 F. Supp. 3d 104, 107 (D.D.C. 2019)

How can employers make changes to existing employment agreements?

An employer may prospectively modify the terms of at-will employment, and an employee's continued service amounts to acceptance of the modification. See Kauffman v. Int'l Bhd. of Teamsters, 950 A.2d 44, 47 (D.C. 2008). In other employment circumstances, the parties may agree to contractual terms that set if or how the agreement may be modified.