DOL to Update Worker Classification Rules

June 8, 2022

Last week, the Department of Labor (DOL) announced plans to update the rules on determining whether a worker is an employee or independent contractor. While employers typically support greater flexibility in classifying employees vs. independent contractors, unions are pushing to classify more independent contractors as employees.

Jessica Looman, acting administrator for the Wage and Hour Division wrote that, “For too many workers, misclassification causes lost wages, benefits, unemployment insurance, and workers’ compensation coverage.” She also singled out specific industries where the Wage and Hour Division has identified misclassification, namely construction and health care.

Prior to leaving office, the Trump administration enacted a regulation making it easier for businesses to classify workers as independent contractors using an economic realities test. The Biden administration has pushed to repeal that rule but a federal court denied Biden’s complaint which is now the subject of an appeal.

The Wage and Hour Division will hold two forums later this month to hear from those who would be affected by the regulation.

Employers can testify on June 24 at 2:30 p.m.