The Department of Labor’s Wage and Hour Division on Feb. 19 withdrew its opinion letter from April 2019 that indicated gig economy workers who offer services in a virtual marketplace are independent contractors, according to an article on JDSupra. This recent withdrawal is another signal that the Department of Labor under the Biden administration is closely scrutinizing the classification of workers as independent contractors.
An opinion letter is an official, written opinion by the department’s Wage and Hour Division on how a particular law applies in specific circumstances presented by an individual person or entity that requests an opinion. The April 2019 letter addressed a specific virtual marketplace firm that operates in the “on-demand” or “sharing” economy. “Generally, a [virtual marketplace company] is an online and/or smartphone-based referral service that connects service providers to end-market consumers to provide a wide variety of services, such as transportation, delivery, shopping, moving, cleaning, plumbing, painting and household services,” the letter stated.
The withdrawal of this opinion letter follows the department’s proposed delay of the effective date of the Trump-era final rule entitled “Independent Contractor Status Under the Fair Labor Standards Act.”