Photo by US Department of Labor licensed under CC BY 2.0: https://bit.ly/3VX8Ejx
The Biden administration set the tone for the new year on Tuesday by finalizing regulations that place greater restrictions on the rights of independent contractors.
The final rule from the Biden Department of Labor (DOL) is set to come into effect on March 11, 2024, overturning a 2021 independent contractor rule published by the Trump administration. Whereas the previous rule had opened up new opportunities for Americans to access flexible work arrangements, the rule published by the Biden DOL aims to make it more difficult for workers to self-classify as independent contractors, reducing their choice and pushing them into W-2 employment status or out of work entirely.
“Millions of Americans choose to work for themselves. To be their own boss. They are independent contractors. Freelancers and those with a side-hustle,” said Grover Norquist, President of Americans for Tax Reform. “Joe Biden and the union bosses want every American to have a boss and to be forced to pay dues to a union. This new Biden regulation will take away an important freedom from millions of Americans.”
The Trump administration’s 2021 rule prioritized the nature and degree of control over work and the individual’s opportunity or profit or loss in determining whether a worker is allowed to be classified as an independent contractor, providing better clarity while increasing choice for the worker. The new rule, however, replaces this dual-factor emphasis with a broader set of less relevant and more subjective factors which will make it tougher to choose an independent contractor status under the law, subject to the whims of federal bureaucrats.
In late 2022, Americans for Tax Reform submitted comments to the Department of Labor urging them to “reject the proposed rule changes which would jeopardize the ability of countless workers to continue working for themselves.”
This new independent contractor rule is the latest in a series of attacks on worker freedom by the Biden administration. In October, Biden’s National Labor Relations Board (NLRB) issued a final rule rejecting the traditional understanding of the joint employer standard. The Department of Labor also continues to be operated by Acting Secretary Julie Su, the architect of California’s disastrous independent contractor crackdown who was rejected by the Senate yet still remains in her acting role.
Fortunately, Congress has begun to take action. Senator Bill Cassidy (R-La.), Ranking Member of the Senate Health, Education, Labor, and Pensions (HELP) Committee, announced plans yesterday to introduce a Congressional Review Act (CRA) resolution to nullify the Biden administration’s independent contractor rule. Similar legislation is under consideration to nullify the NLRB’s harmful joint employer rule.
Members of Congress must continue to push back on President Biden’s attacks on worker freedom as we move into the final year of his term.