September 23, 2021

Volume XI, Number 266

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As Expected, DOL Delays Independent Contractor Final Rule

On March 2, 2021, the U.S. Department of Labor (DOL) formally delayed the effective date of the Independent Contractor Final Rule, from March 8, 2021 to May 7, 2021. The Final Rule, published during the last two weeks of the prior administration, provides that “an individual is an independent contractor, as distinguished from an ‘employee’ under the Act, if the individual is, as a matter of economic reality, in business for him or herself.” Under the Rule, the “economic dependence” inquiry focuses on five, non-exclusive factors, two of which are considered primary – the nature and degree of the worker’s control over the work and the worker’s opportunity for profit or loss – and three additional factors that come into play if the first two factors are inconclusive: the amount of skilled required, the “degree of permanence” of the parties’ work relationship, and whether the putative employee’s work is “part of an integrated unit of production.” The actual practices of the working relationship, and not what the parties’ contract may theoretically allow, is emphasized.

Although only a minority of the more than 1,500 comments supported the proposed delay, the DOL concluded that “allowing more time for consideration of the [] Rule is reasonable given the significant and complex issues the [] Rule raises, including whether the [] Rule is consistent with the statutory intent to broadly cover workers as employees as well as the costs and benefits of the rule, including its effect on workers.” Ultimately, the Final Rule as currently constituted may be revised to make it more difficult to classify workers as independent contractors.

Jackson Lewis P.C. © 2021National Law Review, Volume XI, Number 62
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About this Author

Jeffrey Brecher, Jackson Lewis, Management Arbitration Lawyer, Labor Litigation Attorney
Principal

Jeffrey W. Brecher is a Principal in the Long Island, New York, office of Jackson Lewis, and is Practice Group Leader of the firm's Wage and Hour practice. He has litigated hundreds of cases, defending management at arbitration, before state and federal administrative agencies and at trial.

Mr. Brecher regularly advises clients on compliance with various state and federal laws affecting the workplace, including discrimination and related claims arising under Title VII, Family and Medical Leave Act, Americans with...

631-247-4652
Justin R. Barnes, Jackson Lewis, Federal Employment Lawyer, Discrimination Allegations Attorney
Principal

Justin R. Barnes is a Principal in the Atlanta, Georgia, office of Jackson Lewis P.C. He represents employers in federal and state courts and before administrative agencies on a variety of labor and employment related issues, including collective and class action wage and hour disputes, labor arbitrations, allegations of discrimination, and employment-related contract disputes.

Mr. Barnes’ practice is focused primarily on defending complex wage and hour class and collective actions in state and federal courts across the...

404-586-1809
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