Trucking news and briefs for Monday, March 15, 2021:
Labor Dept. looks to withdraw rule to clarify 'independent contractor' definition
After publishing in early January a final rule to clarify the definition of independent contractor within the Fair Labor Standards Act, the Department of Labor is now proposing to withdraw the rule and keep FLSA’s current independent contractor definition unchanged.
The rule was first set to take effect March 8, but DOL delayed the rule’s effective date to May 7 when the Biden Administration was sworn in.
In a notice of proposed rulemaking published in the Federal Register Friday, the department says it wants to withdraw the rule because “the department questions whether the rule is fully aligned with the FLSA’s text and purpose or case law describing and applying the economic realities test.”
The independent contractor rule would have used five economic-reality factors to help businesses determine whether a worker is an employee or an independent contractor. Two of those factors – the nature and degree of the worker’s control over the work and the worker’s opportunity for profit or loss – were the two “core” factors for determining a worker’s classification and carried greater weight than the other three factors.
The other factors included the amount of skill required for the work; the degree of permanence of the working relationship between the worker and the potential employer; and whether the work is part of an integrated unit of production.
DOL says it is concerned that the rule would have contrasted with the language in the FLSA as well as the position, expressed by the Supreme Court and in appellate cases from various courts, “that no single factor is determinative in the analysis of whether a worker is an employee or independent contractor and, as such, questions whether the rule’s ‘core factor’ approach is supportable.”
