House Committee Debates Changes to Independent Contractor Rule

From Lexology, Hall Benefits Law reports that the Education Committee and Workforce Committee of the United States House recently debated changing the definition of independent contractor. With a divided Congress, it is unlikely that any bill will be passed that changes the defitiion of independent contractor. Hall Benefits Law writes:

During a recent hearing, the U.S. House Education and the Workforce Committee debated the pros and cons of changing the so-called “independent contractor” rule. This rule dictates how to properly classify workers as employees or independent contractors, a distinction that has grown in importance with the steep increase in the independent workforce in recent years.

The distinction between independent contractors and employees can be crucial for workers and businesses. Independent contractors do not enjoy the same legal rights as employees. For instance, independent contractors are not entitled to overtime pay, minimum wage, workers’ compensation, or unemployment compensation benefits. On the other hand, businesses can save significant funds by utilizing the services of independent contractors as opposed to hiring employees.

Congress is currently considering the PRO Act, which would make it more difficult for employers to classify their workers as independent contractors. The National Labor Relations Act (NLRA) does not cover independent contractors.

Source: House Committee Debates Changes to Independent Contractor Rule – Lexology

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