On 7 January 2021, during the Trump administration, the Department of Labor (DOL) published a rule on the distinction between employees and independent contractors, Independent Contractor Status Under the Fair Labor Standards Act. Subsequently, it delayed the rule on 4 March 2021; and then withdrew it on 6 May 2021 — believing that it was inconsistent with the Fair Labor Standards Act’s (FLSA) text and purpose. However, on 14 March 2022, a Texas district court vacated the DOL’s delay and withdrawal rule, and as a result, the Trump administration’s original rule went into effect on 8 March 2021; and it remains in effect.
The DOL now plans to engage in a new rulemaking — to replace the existing rule on employee or independent contractor status.
IEEE-USA remains committed to ensuring that employees are recognized correctly when they are, in fact, employees — so they receive the protections the FLSA provides. At the same time, we recognize the important role legitimate independent contractors play in our economy. DOL held public forums in June to hear diverse perspectives from those who may be affected by employee or independent contractor classification.
The DOL has not indicated what their new rule will look like, although there are concerns that the agency may try to implement some, or all, of the “ABC” test seen in California’s AB 5. That law has had a negative impact on consultants in California; reduced the number of consulting jobs available; and has driven some consultants out of California. IEEE-USA is concerned that a national “ABC” test law could also harm technology consultants — this time — all across the country.
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