Big corporations, trade associations, and their front groups are waging an assault on the U.S. Department of Labor’s proposed independent contractor rule under the Fair Labor Standards Act (FLSA). The proposed rule would replace a 2021 Trump administration rule that improperly narrowed longstanding FLSA protections with a broader interpretation that courts and the USDOL have used for decades. Millions of working people depend on the FLSA’s protections; the proposed rule simply restores those well-established protections and honors the law’s intent.
The proposed rule is a necessary course correction, not a radical sea change.
The Fair Labor Standards Act (FLSA) Primarily Protects Low-Paid Workers. The FLSA generally sets a federal minimum wage (currently $7.25 per hour) for covered employees, requires an overtime wage (currently $10.88) for hours over 40 in a week, and prohibits child labor. Covered workers denied FLSA’s bedrock protections can claim a violation. However, professionals, executives, and administrative employees are exempt from both minimum wage and overtime protections under the FLSA, as are highly compensated employees. Thus, the FLSA—and the FLSA’s independent contractor rule—has no applicability to many employment relationships, and certainly not high-income and salaried employees, much less high-income independent contractors.
The USDOL’s Proposed Rule Restores the Status Quo. Contrary to the claims of big business, lobbying groups, and their misinformed members, the USDOL’s proposed independent contractor rule is a simple and necessary course correction that:
- Restores the multi-factor analysis developed by the U.S. Supreme Court and applied for decades by appellate courts, and the USDOL itself;
- Clarifies that the ultimate question is whether workers are running their own business (and therefore are independent contractors) or dependent on finding work in the business of another;
- Helpfully explains how and why each factor in the “economic realities” analysis helps to answer the question of whether workers are truly in business for themselves; and
- Clarifies that all factors are considered, rejecting the out-of-left-field elevation of two “core” factors in the approach used by the Trump rule.
Big corporations, trade associations, and their front groups are waging an assault on the U.S. Department of Labor’s proposed independent contractor rule under the Fair Labor Standards Act (FLSA). The proposed rule would replace a 2021 Trump administration rule that improperly narrowed longstanding FLSA protections with a broader interpretation that courts and the USDOL have used for decades. Millions of working people depend on the FLSA’s protections; the proposed rule simply restores those well-established protections and honors the law’s intent.
The proposed rule is a necessary course correction, not a radical sea change.
The Fair Labor Standards Act (FLSA) Primarily Protects Low-Paid Workers. The FLSA generally sets a federal minimum wage (currently $7.25 per hour) for covered employees, requires an overtime wage (currently $10.88) for hours over 40 in a week, and prohibits child labor. Covered workers denied FLSA’s bedrock protections can claim a violation. However, professionals, executives, and administrative employees are exempt from both minimum wage and overtime protections under the FLSA, as are highly compensated employees. Thus, the FLSA—and the FLSA’s independent contractor rule—has no applicability to many employment relationships, and certainly not high-income and salaried employees, much less high-income independent contractors.
The USDOL’s Proposed Rule Restores the Status Quo. Contrary to the claims of big business, lobbying groups, and their misinformed members, the USDOL’s proposed independent contractor rule is a simple and necessary course correction that:
- Restores the multi-factor analysis developed by the U.S. Supreme Court and applied for decades by appellate courts, and the USDOL itself;
- Clarifies that the ultimate question is whether workers are running their own business (and therefore are independent contractors) or dependent on finding work in the business of another;
- Helpfully explains how and why each factor in the “economic realities” analysis helps to answer the question of whether workers are truly in business for themselves; and
- Clarifies that all factors are considered, rejecting the out-of-left-field elevation of two “core” factors in the approach used by the Trump rule.
