Today the Department of Labor’s new proposed rule on determining whether a worker is an employee or an independent contractor was published in the official Federal Register, triggering a 30-day public comment period that will last until October 26, 2020.
The DoL says the rule adopts an “economic reality” test to determine whether a worker is an employee or an independent contractor, and, instead of identifying a list of factors as in the past, it identifies two “core” factors and three “other” factors.
The proposed rule has already created controversy, with some claiming it makes it easier for businesses to classify workers as independent contractors and so avoid requirements such as compliance with the minimum wage and overtime law. A clue to whether that is the case may be found in the Labor Department’s introduction to the rule, which states that it is expected to be a “deregulatory action” under a Trump Administration executive order.
Whether the rule actually provides clarity in the area is open to debate, but it is pretty certain that, once the rule becomes final, it will result in considerable litigation, either directly against the Department of Labor or in other legal proceedings where the proper classification of a worker becomes an issue.