The US Department of Labor today announced plans to withdraw the Independent Contractor Rule finalized in January. The Washington Post reported the rule limited the ability of workers to argue they were misclassified as independent contractors; the rule had been introduced under the Trump administration.
“By withdrawing the Independent Contractor Rule, we will help preserve essential worker rights and stop the erosion of worker protections that would have occurred had the rule gone into effect,” said U.S. Secretary of Labor Marty Walsh. “Legitimate business owners play an important role in our economy but, too often, workers lose important wage and related protections when employers misclassify them as independent contractors.”
Several reasons for withdrawing the rule were cited by the department:
- The independent contractor rule was in tension with the FLSA’s text and purpose, as well as relevant judicial precedent.
- The rule’s prioritization of two “core factors” for determining employee status under the Fair Labor Standards Act would have undermined the longstanding balancing approach of the economic realities test and court decisions requiring a review of the totality of the circumstances related to the employment relationship.
- The rule would have narrowed the facts and considerations comprising the analysis of whether a worker is an employee or an independent contractor, resulting in workers losing FLSA protections.
The withdrawal will be published on Thursday and be available here.