U.S. DOL Delays Effective Date of ABC-supported Independent Contractor Final Rule

NEWS

U.S. DOL Delays Effective Date of ABC-supported Independent Contractor Final Rule

March 3, 2021

On March 2, the U.S. Department of Labor’s Wage and Hour Division announced a final rule that delays the Trump administration’s DOL 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 Fair Labor Standards Act.

The DOL states, “This delay will allow the department additional time to review the multiple issues of law, policy and facts that warrant additional review and consideration in accordance with the Regulatory Freeze Memorandum before the independent contractor rule goes into effect.”

The WHD proposal indicated that the sole purpose of the delay was 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 asserted 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 its comment letter, ABC argued that 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. ABC 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.

The rule will be officially published in the federal register on March 4.

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