Employee or Independent Contractor?

Deadline for Comments on DOL Independent Contractor Rule

From The National Law Review, Rebekah K. Herman and Alan J. Marcuis discuss the United States Department of Labor’s proposed rule for classifying workers as employees or independent contractors and the pending deadline for submitting comments. Rebekah and Alan write:

The U.S. Department of Labor (“DOL”) recently released a proposed rule seeking to clarify independent contractor vs. employee status under the Fair Labor Standards Act (“FLSA”).   The proposed rule seeks to simplify the “economic realities” test currently applied by federal courts in various forms.  “The Department’s proposal aims to bring clarity and consistency to the determination of who’s an independent contractor under the Fair Labor Standards Act,” Secretary of Labor Eugene Scalia explained in the DOL’s news release.  “Once finalized, it will make it easier to identify employees covered by the Act, while respecting the decision other workers make to pursue the freedom and entrepreneurialism associated with being an independent contractor.”

Public Comments Can Be Submitted and Viewed Electronically

Comments on the proposed rule must be submitted by October 26, 2020, and can be submitted electronically via the Federal Register website.  The site also provides additional details about the proposed rule and access to the comments submitted to date.  The rule will not go into effect until after the DOL considers the public comments and publishes a final rule.

If finalized, the rule will provide greater clarity, in the context of the FLSA, to businesses that engage independent contractors.  Generally, courts will apply an agency’s rule that reasonably interprets a statute.  However, an agency’s rule can be subject to challenge, for example, if it contradicts the statute in question or the statute directly speaks to the issue.  (See our recent blog post.)  Further, the DOL’s independent contractor rule will not impact other federal agencies’ rules (IRS or NLRB) or state laws that apply more stringent independent contractor classification standards such as the ABC test adopted in several states (e.g., California’s AB 5).

Read the full story at Deadline for Comments on DOL Independent Contractor Rule

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