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ABC Files Lawsuit Against DOL for Delaying the Trump Administration’s Independent Contractor Final Rule

March 31, 2021

On March 26, ABC, ABC’s Southeast Texas Chapter and the Coalition for Workforce Innovation filed suit against the U.S. Department of Labor regarding its delay and proposed withdrawal of the Trump DOL independent contractor final rule. The complaint alleges the Biden administration arbitrarily and without authority delayed the final rule from going into effect, depriving many contractors of clear and uniform guidance on the proper standard for compliance with the Fair Labor Standards Act.

The Trump DOL’s independent contractor final rule, which should have taken effect on March 8, was delayed by the Biden DOL to May 7. Soon after, the Biden DOL issued a notice of proposed rulemaking to withdraw the final rule in its entirety.  ABC’s general counsel, Littler Mendelson P.C., is representing the plaintiffs in the legal challenge.

Background

ABC is on record as strongly supporting the Trump DOL independent contractor final rule, which clarifies the department’s interpretation of independent contractor status under the Fair Labor Standards Act and promotes certainty for employers, independent contractors and employees.

However, on March 4, the Biden administration announced a final rule that delayed the Trump-era independent contractor final rule’s effective date from March 8 to May 7, 2021. On Feb. 24, ABC submitted comments in opposition to the DOL’s proposal to delay the effective date because the final rule provides urgently needed clarification of the independent contractor standard applicable under the FLSA.

On March 12, the DOL published a proposed rule to withdraw the Trump-era final rule. ABC issued a statement condemning the DOL’s proposal, stating the independent contractor final rule promised to promote economic growth in the construction industry by providing greater clarity and removing unnecessary burdens on construction industry employers.

ABC will continue to monitor this important issue and provide any updates in Newsline.

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