Winstead PC Shareholder Taylor White published his column in Texas Lawyer about labor and employment issues and trending topics. The article is titled “Misclassification Whiplash: US Department of Labor Withdraws Independent Contractor Rule.” The article is below:
As of May 6, the United States Department of Labor withdrew the Trump Administration’s “Independent Contractor Rule” (Rule). The Rule, had it gone into effect, would have arguably been more employer-friendly in that it would have potentially broadened the factual circumstances in which an independent contractor relationship could be found. It did so by focusing a 5-factor analysis on two “core factors,” which were “(1) [t]he nature and degree of the worker’s control over the work; and (2) the worker’s opportunity for profit or loss.”
The Department of Labor believed the rule was at odds with the FLSA’s statutory text and existing judicial precedent regarding the same. Specifically, the Department of Labor stated that the Rule’s focus on “two ‘core factors’ for determining employee status under the FLSA would have undermined the longstanding balancing approach of the economic realities test and court decisions requiring a review of the totality of the circumstances related to the employment relationship.” The Department of Labor’s goal with the withdrawal is to preserve protections for workers under the FLSA, as well as to ensure their access to benefits normally attendant in an employment relationship.
Continue Reading Taylor White in Texas Lawyer: Misclassification Whiplash: US Department of Labor Withdraws Independent Contractor Rule