Nicole, Here Are Your Articles for Monday, May 10, 2021
Is this email not displaying correctly?
View it in your browser .
Our Website Contact Us About Us Services Tutorials Acumatica
Share Save

DOL Withdraws Independent Contractor Rule

 

In May 2021, the Department of Labor withdrew the “Independent Contractor Status Under the Fair Labor Standards Act” final rule. According to the Society for Human Resource Management, "The DOL has traditionally analyzed a number of factors to consider whether a worker is an independent contractor or employee and looked at 'the totality of the circumstances.' The withdrawn rule would have applied a more-limited economic-reality test."

The Wall Street Journal explained the rule would have made it "more difficult for a gig worker, such as an Uber or DoorDash driver, to be counted as an employee under federal law." The WSJ also said the DOL will likely "continue to use its previous regulation to enforce the Fair Labor Standards Act, which was enacted in 1938" and that the rule withdrawal doesn’t actually change gig worker classification. It quoted a DOL spokesperson as saying that there were no new independent contractor rules on the horizon.

The DOL said that it "believes that the Rule is inconsistent with the FLSA’s text and purpose, and would have a confusing and disruptive effect on workers and businesses alike due to its departure from longstanding judicial precedent."

Employers and workers alike should keep an eye on DOL actions and any future court cases and take guidance from qualified professionals.

They should also be aware of state laws. California has an especially strict independent contractor test: Workers are not independent contractors unless the hiring entity satisfies all three of the following conditions:

  • The worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact.
  • The worker performs work that is outside the usual course of the hiring entity’s business.
  • The worker is customarily engaged in an independently established trade, occupation or business of the same nature as that involved in the work performed.

Illinois, Massachusetts and New Jersey have similarly strict tests, according to the SHRM, which said the Biden administration favors an eventual federal rule similar to California's.

 

 
Share Save

Your Comments

Siegel Solutions Inc
Siegel Solutions Inc
(781) 487-7000
info@siegelsolutions.com
144 Gould Street Suite 205
Needham, MA 02494
Friend Me on Facebook
Follow Me on Twitter
Connect with me on LinkedIn
Saved Articles
Comments and Feedback
Refer A Friend
Your Privacy
Our firm provides the information in this e-newsletter for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. Tax articles in this e-newsletter are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided "as is," with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.
Powered by
Copyright © IndustryNewsletters All rights reserved.

This email was sent to: ncormierdesign@gmail.com

Mailing address: 144 Gould Street Suite 205, Needham, MA 02494