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ABC Supports Independent Contractor Status Revisions in DOL Proposal

October 28, 2020

On Oct. 26, ABC submitted comments on the U.S. Department of Labor’s proposed rule revising its interpretation of independent contractor status under the Fair Labor Standards Act.

According to a DOL news release, the proposed rule makes key revisions to determine whether a worker is an employee under the FLSA or an independent contractor, which includes the adoption of an “economic reality test” and the use of two “core factors” to help determine a worker’s status and more.

In its comments, ABC expressed its support for the proposal, which clarifies the agency’s interpretation of independent contractor status under the FLSA and promotes certainty for employers, independent contractors and employees.

“Independent contractors are essential to many aspects of the construction industry,” said ABC in its comments. “They provide specialized skills, entrepreneurial opportunities and stability during fluctuations of work common to construction. At the same time, due to conflicting and confusing tests for independent contractor status, construction firms have been unfairly targeted for alleged misclassification of some workers as independent contractors, resulting in expensive and time-consuming litigation and less efficient performance of construction work.

“ABC believes DOL’s proposed rule will promote economic growth in the construction industry by providing greater clarity to construction industry employers as to the proper classification of independent contractors and employees under the FLSA,” ABC said.

ABC also urged DOL to include further clarifications and a “safe harbor” with regard to enforcement of the FLSA, so that construction contractors do not jeopardize any independent contractor’s status as such while attempting in good faith to comply with the myriad of conflicting requirements of other federal and state laws.

For more information on the proposed rule, see ABC’s general counsel’s analysis, DOL Releases Proposed Regulation on Independent Contracting.

ABC will continue to keep members informed of any developments about this rulemaking in Newsline.

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