Last October, the Biden Administration’s Department of Labor published a Notice of Proposed Rulemaking to revise the Department’s guidance on how to determine who is an employee or independent contractor under the Fair Labor Standards Act. This new rule would replace the Trump-era Independent Contractor Rule and make it more difficult for a worker to be classified as an independent contractor. If the Biden administration’s rule is finalized, serious setbacks would be incurred for small businesses, app-based work, and individuals who enjoy work flexibility which is why I introduced H.R. 781, the Guaranteeing Independent Growth (GIG) Act.
This legislation would codify the Trump-era Independent Contractor Rule and clarify who is an independent contractor under the Fair Labor Standards Act by establishing a two “core” factor test: the nature and degree of the individual’s control over the work and the individual’s opportunity for profit or loss. With a third of Americans utilizing independent contracting work in the past twelve months, contracted labor has become vital across many industries.
Instead of making it easier for Americans to enter the workforce, President Biden is unnecessarily complicating the standards for determining whether a worker is an employee or an independent contractor. Any complicated rule by the federal government will only hurt workers who want to remain independent and have flexibility.
Click here to read more about the GIG Act.