A congressional committee has advanced a resolution that would nullify the Department of Labor’s (DOL) revised process for determining whether a worker is an employee or independent contractor.
The move comes after the DOL issued a new final rule in January that implemented an analysis of six factors to determine whether a worker should be considered an employee or an independent contractor. Those factors include:
- Any opportunity for profit or loss a worker might have
- The financial stake and nature of any resources a worker has invested in the work
- The degree of performance of the work relationship
- The degree of control an employer has over the person’s work
- Whether the work the person does is essential to the employer’s business
- The worker’s skill and initiative
The updated rule is expected to expand the number of workers who qualify as employees. However, some members of Congress are now taking up the issue in an effort to return to the previous, three-year-old standard. On March 21, the House Education and Workforce Committee voted 21-13 to advance a Congressional Review Act resolution that would nullify the independent contractor rule. In a press release on its action, the committee said the resolution “offers Congress the opportunity to take a unified stand against the department’s thirst for more government control over America’s workforce.” Additionally, the committee said the resolution “upholds entrepreneurial opportunities and flexibility instead of heavy-handed mandates from the federal government.”
In March, the National Association of Wholesaler-Distributors and a group of 46 business organizations sent a letter supporting the resolution. The letter called the new rule “unnecessary,” said its multi-factor approach to determining independent contractor status would create confusion and that it would limit independent and flexible work opportunities. “The reality is that today, there are over 9 million job openings across the country,” the letter stated. “Yet, millions of Americans continue to exercise their choice to work as independent contractors and run their own businesses.”