Employee or Independent Contractor?

DOL Aims to Fast-Track Worker Classification Rule to 2020 Finish

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From Bloomberg Law, Ben Penn reports that the United States Department of Labor is working on a regulation that would define when workers were employees or independent contractors under federal wage law. Ben writes:

The Labor Department is accelerating a plan to propose and finalize this year a worker classification regulation defining when workers are independent contractors or employees under federal wage law.

The timeframe for such a significant rule—only six months for the proposal, public comment period, and final publication—would be far more compressed than the typical regulatory process. But that’s the mission of senior DOL officials who are making the independent contractor issue a top priority, said five current and former administration sources and others briefed on the plans.

The administration wants to wrap up the rulemaking in the final months of President Donald Trump’s term in part because a Democrat could be president next year, said the sources, who spoke on condition of anonymity. If a worker classification rule were to be proposed but not finalized and Trump doesn’t get re-elected, a new administration would easily be able to kill the effort. Or new DOL leaders inheriting the incomplete rule could finalize it by interpreting the term “employee” much more broadly than Republican regulators envisioned.

The Democrat-majority House and a growing number of state legislatures have enacted bills to force businesses into reclassifying independent contractors as employees, giving them enhanced labor protections. The DOL rule, which the White House has labeled “deregulatory,” also surfaces amid a wave of worker lawsuits against corporations from Uber to Amazon alleging independent contractor misclassification.

Democratic presidential nominee Joe Biden recently endorsed a 2019 California law that designates workers as employees if they’re doing work that isn’t outside the usual course of a company’s business, a rigid legal test that’s now the subject of an Uber-backed state ballot initiative this fall seeking to roll back the measure. That’s the same classification standard the House adopted in February with the Protecting the Right to Organize Act, a wide-ranging labor law overhaul backed by unions that’s been a non-starter in the GOP-controlled Senate.

The business community’s pushing the department to finish the initiative to beat legislative action, although the rule wouldn’t pre-empt state laws that are more protective of workers.

“I have full confidence that the Department of Labor will issue a rule on independent contractors by the end of the year,” said Michael Lotito, a management attorney at Littler Mendelson who represents the U.S. Chamber of Commerce in a brief supporting a legal challenge from Uber and Postmates to halt the California classification bill. “This is one of the most cataclysmic issues in labor and employment law and it’s most important for the Department of Labor to give us their view.”

The DOL declined to comment on an unreleased rule and didn’t address questions about Election Day implications. A department spokeswoman deferred questions about the regulatory agenda to the White House Office of Management and Budget. An OMB media representative didn’t respond to a request for comment.

Read the full story at DOL Aims to Fast-Track Worker Classification Rule to 2020 Finish

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