A rule changing the definition of an independent contractor may soon be officially discarded by the federal Department of Labor.
In the final weeks of the Trump Administration, a rule called “Independent Contractor Status under the Fair Labor Standards Act,” was published in an attempt to provide more clarity on the question of who is an independent contractor and who is an employee.
Although a final determination in the matter has not been announced, the latest move by the Labor Department is seen as part of a larger Biden Administration effort to review all labor regulations passed at the end of the Trump presidency.
More specifically, the proposed rule change would do away with what was called an “economic reality” test to determine a worker’s status as an independent contractor or employee.
The Notices of Proposed Rulemaking, then, seeks to end the Joint Employer and Independent Contractor Final Rules.
The rules, in essence, said that joint employer liability must be guided by whether an employer could hire or fire an employee; supervise the schedule and condition of employment; determine the method of payment; and maintain the employee’s work records.
The new Labor Department approach is seeking a more holistic approach to who is and who isn’t an independent contractor or employee.
In making its announcement, the Labor Department said the Trump Administration rule change was not supported by text or case law, and also fid not fully weigh the benefits as well as costs of the change.
The Trump rule change was opposed by several groups, including the Teamsters, which said “companies across the country have sought loopholes and workarounds to misclassify workers as independent contractors, which denies them proper wages and job protections as well as access to unemployment benefits.”
Opposing the new Labor Department initiative, Ben Brubeck, Associated Builders and Contractors vice-president, said the Trump rules “promised to promote economic growth in the construction industry by providing greater clarity and removing unnecessary burdens on construction industry employers.”
Comments regarding the new Department of Labor decision will be accepted up to April 12.
By Garry Boulard
