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  • Jody McLeod

New Biden Administration delays the DOL's Independent Contractor Rule

Employers need to keep tabs on the latest moves made by the United States Department of Labor (DOL).

Under the Trump Administration's DOL , it took a hard look at the test used to determine what is an independent contractor (IC) in today's workplace. It issued its proposed rule relaxing the IC test and allowed public comment to its proposal. Over 1700 comments were submitted during the public comment period The DOL then announced on January 6, 2021 (with an effective date 60 days later) its final rule revising its interpretation of the Fair Labor Standards Act's (FLSA) independent contractor test.

This final rule published in January relaxed the test for ICs by updating the previous 'economic reality' testing primarily focused on 2 core factors:

  • the nature and degree of worker control over their work; and,

  • the opportunity for profit/loss based on initiative, investment or both.

Also to be considered during the evaluation process however, "less probative than the core factors":

  • amount of skill required;

  • degree of permanence of the working relationship;

  • whether the work is a part of an "integrated unit of production".

Employers saw this rule as a positive development for employers and a better reflection today's work place. But hold on... enter the new Biden Administration's DOL.

On February 3rd, the DOL proposed a delay of final rule's effective date to May 7, 2021 in accordance with a President Biden directive. This proposal is to allow stakeholders the opportunity to submit public comment.

It is unclear what can be gained from an additional comment period.

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