The Department of Labor on Wednesday, Jan. 10, will finalize a rule that rolls back a Trump-era rule offering guidance on determining employee or independent contractor classification under the Fair Labor Standards Act. Early reactions from trucking associations and labor groups generally split when it comes to favor or furor over the change.
The rollback has been in the works since the Biden Administration took office in 2021. The Trump Administration’s DOL, as one of its final acts in January 2021, published a rule that included a test to determine if a worker was independent or an employee that relied on five factors, but put greater emphasis on two “core factors” -- the nature and degree of the worker’s control over the work and the worker’s opportunity for profit or loss.
Other “non-core 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.
The effective date of the rule was March 8, 2021, but on March 4 of that year, the Biden DOL delayed the effective date, then on May 6 withdrew the rule completely. A lawsuit challenging the department’s delay and withdrawal, however, led the U.S. District Court for the Eastern District of Texas to issue a decision vacating the delay and withdrawal, allowing the Trump-era rule to take effect.
Backtracking, the DOL in October of 2022 issued a notice of proposed rulemaking to rescind and replace the 2021 rule. The department said it “believed that the 2021 IC Rule did not fully comport with the FLSA’s text and purpose as interpreted by courts and departed from decades of case law applying the economic reality test.”
The final rule publishing Wednesday will take effect 60 days after its publication in the Federal Register, on March 11.
[Related: Biden DOL a step closer to rolling back Trump-era worker classification rule]
