Whether it makes itself apparent in fashion (Resurgence of wide-leg jeans anyone?), style (Did I recently see a celebrity sporting a mullet?), or some other aspect of our daily lives, the adage “everything old is new again” routinely makes an appearance. It is now being brought to you by the Department of Labor (DOL), with its recent Notice of Proposed Rulemaking (NPR), which seeks to codify the definition of an independent contractor under the Fair Labor Standards Act (FLSA).
Historically, the FLSA did not address requirements for independent contractor status, providing any guidance through opinion letters. This has left the requirements open to interpretation and somewhat “liquid,” changing with political administrations. Under the Trump administration’s 2021 Independent Contractor Rule, two core factors were assigned greater weight in making the determination. Ultimately, it expanded the ability to classify certain workers as independent contractors (i.e., self-employed).
The DOL’s new proposal is actually a return to the old pre-2021 Independent Contractor Rule, which considers the “totality of circumstances” and removes particular significance, or weight, assigned to any of the requirements. Ultimately, this could result in the need to reclassify thousands of independent contractors to the status of employees.
During the original comment period, a number of business groups expressed concern that the original NPR period did not provide enough time for comments on this complex topic and the DOL extended the comment period by 15 days--from November 28th to December 13th. You can find more details on the proposed rulemaking here.
As one of my colleagues said--these issues seem to play out much like a tennis match volleying back and forth based on the current administration. For now, we will have to patiently wait to see what the final outcome will be. In the meantime, let’s enjoy the beautiful fall colors—a “new” change to enjoy each year.