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Department of Labor Finalizes Independent Contractor Rule, Helps Bring Clarity for Workers

Jan 6, 2021 by AFP

Arlington, VA – Americans for Prosperity (AFP) today commended the Department of Labor for finalizing a rule on Independent Contractor status under the Fair Labor Standards Act. The rule brings clarity and greater certainty to a test used by the Department of Labor to determine if a worker should be classified as an employee or an independent contractor.

AFP Chief Government Affairs Officer Brent Gardner issued the following statement:

“Independent contracting is more important than ever, giving millions of Americans an avenue to earn a living in a way that works for them. This rule puts people in control of their economic fortunes, removing a complicated and burdensome regulatory framework that made it difficult for employers and independent contractors to work together.

“We commend the Department of Labor and the Trump Administration for making it easier for Americans to work. Although this is a great move for workers and helping our economy recover stronger, Congress should update employment laws to protect work flexibility and independent contracting.”

Background: 

Up to this point, DOL has never adopted formalized criteria for independent contractors, instead utilizing general guidance provided by the Supreme Court such as in the 1947 United States v. Silk decision. As a result, self-employed individuals have often been improperly misclassified as employees under the Fair Labor Standards Act of 1938 (FLSA), and costly litigation has negatively impacted workers, businesses, and the DOL itself. That has made it difficult – sometimes impossible – for willing independent contractors and employers to come together.

In October, Americans for Prosperity’s sister organization, Americans for Prosperity Foundation, submitted comments to the DOL regarding the rule.

AFP: Administration Right to Protect Worker Flexibility, 9/22/20

Why independent contracting is important, and why it should be protected, 11/16/20

The Department of Labor’s independent contractor rule change is great news for America’s workforce, 1/6/21