Employee or Independent Contractor?

Will Biden’s Administration Seek a New Independent-Contractor Rule?

From SHRM, Lisa Nagele-Piazza, J.D., SHRM-SCP, and Allen Smith, J.D. say that the United States Department of Labor (DOL) is likely to issue its proposed rule before Joe Biden is inaugurated and that a Biden administration is likely to delay, rescind, or not defend any challenges to it. Lisa and Allen also discuss that whether a Biden administration broadens the definition of “employee”  it. They also note that state laws may be more restrictive than federal law. Lisa and Allen write: 

Previous guidance from 2015 under former President Barack Obama’s administration called for a narrower view of what was considered an independent contractor, which would result in most workers being classified as employees.

Biden’s administration may focus on expanding the definition of “employee” as much as possible, noted Brett Coburn, an attorney at Alston & Bird in Atlanta.

The president-elect supports the Protecting the Right to Organize (PRO) Act, which, among other changes, would make it harder to classify workers as independent contractors by adopting an “ABC” test.

But whether the U.S. Senate takes up the PRO Act will likely depend on the outcome of Georgia’s Senate races. The incoming Senate is split at 50-48 in Republicans’ favor. Two races in Georgia are scheduled for a runoff on Jan. 5.

“So much depends on the outcome to see whether the PRO Act will even get a hearing in the Senate, let alone get on the floor,” Lotito said.

Under the PRO Act, workers would be classified as employees unless:

  • A: The worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact.
  • B: The worker performs tasks that are outside the usual course of the hiring entity’s business.
  • C: The worker is customarily engaged in an independently established trade, occupation or business of the same nature as the work performed for the hiring entity.

According to Biden’s campaign website, employee misclassification “is made possible by ambiguous legal tests that give too much discretion to employers, too little protection to workers, and too little direction to government agencies and courts.” Biden also wants to ensure that gig workers receive employment benefits and protections.

Read the full story at Will Biden’s Administration Seek a New Independent-Contractor Rule?

Back to Top