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ABC Opposes DOL’s Proposal to Delay Effective Date of Independent Contractor Final Rule

March 1, 2021

On Feb. 24, ABC submitted comments in opposition to the U.S. Department of Labor’s Wage and Hour Division proposal to delay the effective date of the Trump DOL’s final independent contractor rule from March 8 to May 7.

The WHD proposal indicates that the sole purpose of the delay is for the WHD to “review and consider the rule as the Regulatory Freeze Memorandum and Office of Management and Budget Memorandum M-21-14 contemplate,” specifically the “legal, policy and/or enforcement implications of adopting that standard.” WHD asserts that the proposed delay is reasonable and would not be disruptive since the “independent contractor final rule is not yet effective, and WHD has not implemented the rule.”

In the comment letter, ABC argued that the Trump DOL’s final rule must be allowed to go into effect in the meantime, because it provides urgently needed clarification of the independent contractor standard applicable under the Fair Labor Standards Act. The WHD’s hasty and unsupported attempt to delay the effective date of the final rule is arbitrary, capricious and in violation of the Administrative Procedure Act. ABC therefore urges the WHD to maintain the rule’s current effective date of March 8.

ABC is on record as strongly supporting the Trump DOL’s independent contractor final rule, which clarifies the WHD’s interpretation of independent contractor status under the FLSA and promotes certainty for employers, independent contractors and employees. ABC therefore believes it is essential that the final rule be allowed to take effect in March so that it can provide the additional clarity and guidance needed to properly classify workers in construction and avoid jeopardizing the ability of construction firms to continue the industry’s longstanding practice of utilizing legitimate independent contractors under the FLSA.

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