WASHINGTON — Senators Braun, Burr and Thune are leading a bicameral letter with Rep. Foxx (R-N.C.) urging the Department of Labor (DOL) not to move forward with its proposed rule for determining independent contractor classification due to the negative impact on workers and business, the test’s lack of clarity and the devastating consequences for the U.S. economy.
They are joined by Sens. Hagerty, Romney, T. Scott, Cramer, Johnson, Barrasso, Cassidy, Lankford, Marshall, Hoeven, Blackburn, Boozman, Tuberville, Young, Lummis, Lee, R. Scott, Inhofe, Graham, Fischer, Ernst, Shelby, and Rounds as well as Reps. Wilson, Thompson, Walberg, Grothman, Stefanik, Allen, Banks, Comer, Fulcher, Keller, Miller-Meeks, Owens, Good, McClain, Harshbarger, Miller, Spartz, Fitzgerald, Steel, and Pete Sessions.
“The independent contractor proposed rule would have immediate and long-term disruptive effects on millions of workers and thousands of businesses at a time when the economy is facing high inflation rates. A study by Upwork estimates that 59 million Americans performed freelance work in 2021 and contributed $1.3 trillion to the U.S. economy. Small and large businesses in hospitality, healthcare, education, agriculture, transportation, construction, finance, law, housing, entertainment, and more utilize independent contractors to meet their needs. This allows businesses to have a dynamic workforce while giving workers the autonomy and flexibility they prefer. It is clear the proposed rule’s attempt to restrict this flexibility for businesses and workers will be disruptive,” the lawmakers wrote.
“We urge DOL not to move forward with its proposed rule for determining independent contractor classification due to this negative impact on workers and businesses, the test’s lack of clarity, and the devastating consequences for the U.S. economy. The proposed rule will jeopardize millions of individuals’ independent contractor status under the FLSA. Instead, DOL should maintain the 2021 rule, which was designed for the modern economy and brought clarity to workers and businesses,” the lawmakers continued.
Read the full letter HERE
Background
- On October 13, 2022, the Department of Labor’s (DOL) Wage and Hour Division published its Notice of Proposed Rulemaking entitled “Employee or Independent Contractor Classification Under the Fair Labor Standards Act” which would rescind and replace the independent contractor rule adopted in 2021 by the Trump Administration.
- In its place, DOL proposes a six-factor economic reality test to determine whether a worker is “economically dependent” on a company under a totality of the circumstances. Similar to the ABC test found in the PRO Act, the rule is extremely restrictive. The rule argues that theoretical control is enough to give DOL the ability to make employment determinations.
- According to the Institute for the American Worker, “such a broad interpretation would have a chilling effect on self-employment, putting conceivably all independent contracting work in jeopardy.”
