Democratic members of the House Labor Caucus told acting Labor Secretary Keith Sonderling Friday to rescind its proposed independent contractor rule and "return to the standard outlined in the 2024 Final Rule to ensure workers remain protected on the job."
In late February, Labor released a new independent contractor rule to determine whether workers are employees or independent contractors under the Fair Labor Standards Act.
The comment period on Labor's plan ends Tuesday.
The proposed rule "would rescind the department's 2024 final rule addressing the classification of independent contractors and replace it with an analysis for employee classification similar to the one adopted by the department in 2021," Labor said in a statement. "Consistent with Supreme Court and federal circuit court precedent, the proposed rule would make it easier to properly differentiate between employees with the protections under the Fair Labor Standards Act and those workers who work as independent contractors."
Labor Caucus co-chairs led over 45 House Democrats urging Sonderling in a letter to "maintain the strong 2024 independent contractor standard under the FLSA and rescind the proposed rule weakening this standard."
They wrote: "Accurate employee classification is essential to ensure every worker is afforded the rights and protections guaranteed under the FLSA that they deserve. Overly narrow interpretations of this relationship expose workers to greater risk of misclassification — which results in catastrophic losses in wages and benefits for that individual and subsequent losses in state and federal revenues. And we've seen these cases play out, often in devastating fashion, when businesses take advantage of employee classification to avoid paying workers what they owe them. These risks have an outsized impact on industries such as construction, entertainment, transportation, home care, and agriculture."
The Financial Services Institute has fought the 2024 rule in court. FSI and its coalition partners sued Labor over the 2024 rule, asking the court to declare it invalid, prohibit the rule's implementation and allow the 2021 independent contractor rule to remain in effect. The 2024 rule went into effect in March 2024.
On April 29 of last year, the court granted Labor's motion for a temporary suspension to provide DOL sufficient time to "reconsider the regulation."
The lawmakers told Labor Friday that the independent contractor rule "must consider the totality of circumstances to identify the employer-employee relationship. The proposed rule acknowledges that 'the precise weight of any additional factors would depend on the circumstances of each case' but remains overly prescriptive in weighing the 'core' factors."
A multifactor approach, they wrote, "would ensure that no employee in our communities falls through the cracks, and the proposed rule's intentional deprioritization of other economic reality factors ignores the unique circumstances presented in the rapidly evolving and modernizing workforce."
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