From Fox News, Lori Chavez-DeRemer, Secretary of the United States Department of Labor (DOL), discusses the DOL’s proposed rule for classifying workers as employees or independent contractors. Secretary Chavez-DeRemer writes:
By providing American workers and employers with clear guidance within the confines of longstanding legal precedent, my department balances the need to give independent workers and entrepreneurs the flexibility they want with our mandate to preserve the robust legal protections owed to true FLSA employees.
To that end, our proposed rule would rescind the Biden administration’s 2024 independent contractor rule, which made it harder to work as an independent contractor and led to more confusion than clarity. If left in place, the Biden rule would continue to produce unpredictable results that harm workers and employers alike.
To provide much-needed clarity and help employers comply with the FLSA, our proposed rule would:
- Use the longstanding “economic reality” test adopted by federal courts to determine a worker’s proper classification.
- Identify two “core” factors most useful in determining a worker’s classification: the nature and degree of control the worker has over the work and the worker’s opportunity for profit or loss.
- Advise that three additional factors — skill, permanence, and whether the work is part of an integrated unit of production — have value in this analysis but are typically less useful in determining classification.
- Clarify that the actual practice of a work arrangement — the on-the-ground reality between worker and employer — is more relevant than what is contractually or theoretically possible.
- Provide eight concrete examples of how the factors would apply in real-world circumstances.
No matter the complexity or scope of the work arrangement — whether it involves a rideshare driver, an independent trucker or a freelance writer — the proposed rule will make it easier to define work roles with greater predictability.
By grounding this classification structure in longstanding legal principles and offering illustrative examples of real-world applications, the proposed rule will deliver tangible benefits for independent workers and employees alike.
These changes will also empower employers by reducing the risk of FLSA misclassification violations, which hurt workers and employers who are playing by the rules.
Source: Trump Labor Department proposes rule to rescind Biden contractor policy | Fox News