Source: United States Senator Kevin Cramer (R-ND)
WASHINGTON – U.S. Senator Kevin Cramer (R-ND) joined Senators Mike Braun (R-IN), Richard Burr (R-NC), and John Thune (R-SD) and Representative Virginia Foxx (R-NC-05) on a bicameral letter urging the Department of Labor (DOL) not to move forward with its proposed rule for determining independent contractor classification due to the negative impact on workers and business, the test’s lack of clarity, and the devastating consequences for the U.S. economy.
“The independent contractor proposed rule would have immediate and long-term disruptive effects on millions of workers and thousands of businesses at a time when the economy is facing high inflation rates. A study by Upwork estimates that 59 million Americans performed freelance work in 2021 and contributed $1.3 trillion to the U.S. economy. Small and large businesses in hospitality, healthcare, education, agriculture, transportation, construction, finance, law, housing, entertainment, and more utilize independent contractors to meet their needs. This allows businesses to have a dynamic workforce while giving workers the autonomy and flexibility they prefer. It is clear the proposed rule’s attempt to restrict this flexibility for businesses and workers will be disruptive,” wrote the letter.
“We urge DOL not to move forward with its proposed rule for determining independent contractor classification. The proposed rule will jeopardize millions of individuals’ independent contractor status under the FLSA. Instead, DOL should maintain the 2021 rule, which was designed for the modern economy and brought clarity to workers and businesses,” continued the letter.
Senators Cramer, Braun, Burr, and Thune are joined by Senators Bill Hagerty (R-TN), Mitt Romney (R-UT), Tim Scott (R-SC), Ron Johnson (R-WI), John Barrasso (R-WY), Bill Cassidy (R-LA), James Lankford (R-OK), Roger Marshall (R-KS), John Hoeven (R-ND), Marsha Blackburn (R-TN), John Boozman (R-AR), Tommy Tuberville (R-AL), Todd Young (R-IN), Cynthia Lummis (R-WY), Mike Lee (R-UT), Rick Scott (R-FL), and Jim Inhofe (R-OK).
Click here to read the letter.
Background:
On October 13, 2022, the Department of Labor’s (DOL) Wage and Hour Division published its Notice of Proposed Rulemaking entitled “Employee or Independent Contractor Classification Under the Fair Labor Standards Act” which would rescind and replace the independent contractor rule adopted in 2021 by the Trump Administration.
In its place, DOL proposes a six-factor economic reality test to determine whether a worker is “economically dependent” on a company under a totality of the circumstances. The new rule argues businesses’ theoretical control of workers’ rights is enough to give DOL the ability to make employment determinations, where the 2021 rule encouraged consideration of actual workplace practices. According to the Institute for the American Worker, “such a broad interpretation would have a chilling effect on self-employment, putting conceivably all independent contracting work in jeopardy.”