The U.S. Labor Department’s final independent contractor rule went into effect Monday, after companies scrambled last week to have it sorted or unemployed a preliminary injunction.
DOL announced the final rule in Januarymore than a year after proposing changes to its assessment of workers’ independent contractor status in October 2022.
The new “totality of the circumstances” framework uses six non-exhaustive factors to determine workers’ independent contractor status, including the nature and degree of control over the work, the extent to which the work performed is an integral part of the business of the employer and permanence of the arrangement.
Acting Labor Secretary Julie Su has said the rule will protect full-time workers who are misclassified and often work alongside properly classified employees.
Several business groups, including the Coalition for Workforce Innovation, Associated Builders and Contractors of Northeast Texas, Associated Builders and Contractors, Inc. and Financial Services Institute, Inc., have been challenging the new standard since the administration began looking for ways to implement it. starting in 2021. Their requests have moved to court, but a Texas district court judge did not address the final request for a ban before the DOL rule took effect on 11 of March
Thursday, a group of trucking companies filed an emergency motion in a Louisiana district court for a preliminary injunction, along with an emergency motion for a temporary restraining order, arguing that DOL violated the Administrative Procedure Act, the same argument made by the other groups.
Acting Assistant Attorney General Brian M. Boynton and Julie Strauss Harris, Acting Director of the Department of Justice’s Federal Programs Branch, called the action an “ambush” and filed a brief asking the court to deny the trucking companies’ motion.
In a statement published after the announcement of the rulethe Society for Human Resource Management said “ongoing changes in regulatory guidance impose compliance burdens and legal uncertainties” for HR professionals.
More recently, the association went further, announcing its support a resolution under the Congressional Review Act this would repeal the new independent contractor rule and call for a return to the 2021 rule.
“We believe the current rule encourages ambiguity, dissuading companies from extending essential training to independent workers, a scenario that hurts both parties involved,” Emily M. Dickens, SHRM chief of staff and chief of public affairs . he said in the statement. “The 2021 rule took a balanced approach, promoting business flexibility while curbing the risks of misclassification.”
