The Department of Labor has proposed the withdrawal of a rule promulgated under the Trump Administration that clarified the difference between an independent contractor and a traditional employee under the Fair Standards Labor Act (FSLA).
If the DOL rescinds the rule, it would have a devastating impact on American workers and the economy.
The rule updates several criteria designed to clarify whether or not a worker has independent contractor status. First, the rule contains an “economic reality” test to determine whether an individual works for himself or herself (as an independent contractor) or an employer (as an employee).
Additionally, the rule identifies two “core factors” that help determine an individual’s status as an independent contractor or employee. The first is the nature and degree of control that the individual has over the work itself, such as the ability to set a schedule or work with little or no supervision. The second is the opportunity for profit or loss based on the individual’s investment or initiative.
This criteria brings much needed clarity to independent contractors, the vast majority of whom don’t actually want to be qualified as full-time employees because it would require them to have a boss. Based on a report from the Bureau of Labor Statistics, fewer than 1 out of 10 independent contractors would prefer a traditional employment relationship. According to a report from the Benenson Strategy Group “85% of drivers surveyed said they would prefer to remain independent contractors and receive benefits rather than being classified as employees.”
ATR has collected a list of testimonials of from freelancers and independent contractors of why they oppose the PRO Act and other radical rule changes that would jeopardize their ability to participate in the American economy.
To protect the livelihoods of the more than 57 million Americans that engage in freelance work, the DOL should not rescind the Trump administration rule on independent contractors.