U.S. Dept. Of Labor Proposes New Independent Contractor Rules

On Tuesday, the Department of Labor (DOL) released the text of its much-anticipated proposed rules on independent contractors. The proposal will be formally published in the Federal Register on October 13 and the comment period will be held open for 45 days.

According to the Small Business Legislative Council (SBLC), of which EMA is a member, since the DOL first made it clear that it would be revisiting the independent contractor rules, the big question has been whether the agency would look to implement a stringent ABC test like the one adopted in California.

To the relief of employers, in the proposed rule the DOL has declined to pursue an ABC test and is instead simply returning to and fleshing out the economic realities test that was in place prior to 2021.

The new proposed rules would reinstate the economic realities test with each factor receiving equal weight and with the worker’s and employer’s investments into their respective businesses being broken out as its own factor in the test.

The proposed rules also provide additional detail on how businesses should assess the issue of control and determining whether the work is integral to the employer’s business.

The DOL’s stated goal in these proposed regulations is to bring the regulations back in line with the case law and standards that employers have become accustomed to.

Click Here to read the full SBLC report, including the history of the independent contractor rule.

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