Labor officials propose scrapping independent contractor rule

The U.S. Department of Labor announced this month that it has proposed getting rid of a new rule relating to the use of independent contractors.

The independent contractor rule, which was originally published in January, would require employers to use an economic reality test to gauge financial dependency in an employment relationship in order to determine if workers should be classified as employees or as independent contractors.

Implementation of the rule had already been delayed as President Joe Biden’s administration froze regulatory changes adopted late in former President Donald Trump’s term. Following a review, the Labor Department found the independent contractor rule would “significantly weaken” worker protections under the Fair Labor Standards Act.

Rescinding the independent contractor rule has only been proposed, and the public has until April 12 to comment on plans to get rid of that rule. Employers are encouraged to keep an eye on the DOL website for further updates.