A new U.S. Department of Labor proposed rule on which workers are independent contractors is expected soon, as the White House’s Office of Information and Regulatory Affairs (OIRA) received it for review on July 5. We’ve gathered articles on the news from SHRM Online and other media outlets.
Proposed Rule Nearing Completion
Review by OIRA in the White House Office of Management and Budget is one of the last steps before a proposal becomes public. The rulemaking is the Biden administration’s second attempt to revise how it interprets whether workers should be classified as independent contractors or employees who are protected by the Fair Labor Standards Act (FLSA).
Public Forums Held
Public forums on the proposed rule were held in June on those who may be affected by employee or independent-contractor classification. An employer forum was held June 24 and a worker forum on June 29.
Why the Rule Matters
Under the FLSA, employees are entitled to minimum wage, overtime pay and other benefits. Independent contractors are not entitled to such benefits, but they generally have more flexibility to set their own schedules and work for multiple companies. A Trump administration rule still in effect made it easier for employers to classify workers as independent contractors rather than employees.
Court Reinstated Trump-Era Rule
In January 2021, the department published a rule on the issue under the Trump administration. This rule was delayed under the Biden administration on March 4, 2021, and then withdrawn on May 6, 2021. A March 15, 2022, ruling reinstated the Trump-era independent-contractor rule.
NLRB Standard Revisited
The National Labor Relations Board (NLRB) also has announced it may replace the existing standard for who is an independent contractor. In a notice issued in The Atlanta Opera Inc. case, the NLRB invited briefs on whether the board should continue to follow the independent-contractor standard set out in a 2019 decision during the Trump administration. The board also asked whether it should return to a 2014 Obama-era standard in its entirety or with modifications.
(SHRM Online) and (NLRB)