Policy Matters Podcast - Episode 27: Independent Contractor Classification: An Uneven Analytical Road

Policy issues often have long term widespread and pervasive impact on businesses. Not only can new governmental policies significantly affect the climate for business innovation and growth, they create precedents that affect future legislation and potentially spread across jurisdictions.

Each installment of the Policy Matters Podcast will provide timely updates regarding potential adverse impacts on benefits that policy changes can have on industry growth and offer a preview of what’s next in the competitive marketplace.

---

Episode 27: Independent Contractor Classification: An Uneven Analytical Road

The classification of workers as either independent contractors or employees has been a nationally salient issue for decades, but especially so since the explosion of the so-called gig economy. Until January 6, 2021, the fair labor standards act did not provide a regulatory definition of what constitutes an independent contractor that is not subject to various federal employment laws. On that date, the DOL issued its final rule on “Employee or Independent Contractor Classification,” which for provided a more consistent analysis making the proper classification of a worker as an independent contractor more predictable under the FLSA. And predictability is typically good for business.

Upon Joe Biden’s election, however, the DOL delayed the effective date of that rule, proposed withdrawing it, and then, in early May 2021, formally withdrew the rule after a brief notice and comment period that carried strenuous objections, including from the U.S. Chamber of Commerce. The Rule’s withdrawal has been enjoined by a federal court, but the DOL has pledged not only to appeal that ruling, but also to issue a new notice of proposed rulemaking regarding the classification analysis.

In this special episode, Seyfarth Counsel Scott Mallery and Seyfarth Partner Camille Olson, legislative analyst extraordinaire and frequent witness providing testimony in front of congressional committees, provide an overview of where the law on misclassification at the federal level stands today, where it has been, and what the DOL’s new proposed rule might entail.