June 13, 2021

Volume XI, Number 164

Advertisement

June 11, 2021

Subscribe to Latest Legal News and Analysis

DOL Withdraws Independent Contractor Rule

As we previously discussed, in early January 2021, the U.S. Department of Labor issued a Final Rule regarding independent contractor status under the Fair Labor Standards Act.  On May 5, 2021, in line with the policy goals of the new administration, the Department issued a Final Rule withdrawing the January Final Rule.  The withdrawal went into effect on May 6, 2021, upon the publication in the Federal Register (86 FR 24303).  The January independent contractor rule was originally to go into effect in March, before the Department issued a notice of proposed rulemaking proposing to withdraw the rule.  The January rule identified “the nature and degree of control over the work” and “the worker’s opportunity for profit or loss based on imitative and/or investment” as two “core factors” that would have been the most probative to determine whether a worker was an independent contractor.  The rule also identified three additional factors and would have provided that “the actual practice of the worker and the potential employer is more relevant than what may be contractually or theoretically possible.”

According to the Department’s press release, the withdrawal was intended to help “preserve essential workers’ rights.”  The Department cited as reasons for the withdrawal the independent contractor rule’s “tension” with the FLSA’s text and purpose, as well as judicial precedent, to argue that the rule’s emphasis on two “core factors” “undermined” the more holistic analysis of the employment relationship provided by the economic realities test.  The Department contended that the January rule would lead to workers losing statutory protections.

While it is clear that the Department under Secretary of Labor Martin Walsh rejects the worker classification approach of the previous administration, it remains to be seen how the Department will address this issue in the coming months and years, whether through regulations, subregulatory compliance assistance materials, amicus briefs, or enforcement proceedings.

©2021 Epstein Becker & Green, P.C. All rights reserved.National Law Review, Volume XI, Number 130
Advertisement
Advertisement
Advertisement

TRENDING LEGAL ANALYSIS

Advertisement
Advertisement
Advertisement

About this Author

Corben J. Green Associate ADA and Public Accommodations  Employment Training, Practices, and Procedures  Wage and Hour
Associate

CORBEN J. GREEN is an Associate in the Employment, Labor & Workforce Management practice, in the New York office of Epstein Becker Green. He will be focusing his practice on disability laws, wage and hour issues, and employment training, practices, and procedures.

Mr. Green received his Juris Doctor from Columbia Law School, where he was a Harlan Fiske Stone Scholar and a Notes Editor of the Columbia Journal of Race and Law. He also participated in the school’s Lawyering in the Digital Age Clinic and Domestic Violence Project and...

212-351-4583
Advertisement
Advertisement