ABC: Final Independent Contractor Rule Will Create More Confusion and Litigation Chaos

Associated Builders and Contractors today released a statement from Vice President of Regulatory, Labor and State Affairs Ben Brubeck opposing the U.S. Department of Labor’s independent contractor final rule under the Fair Labor Standards Act.

“By undermining the flexible, independent work for millions of Americans, President Joe Biden’s DOL is choosing to move forward with a final rule that creates an ambiguous and difficult-to-interpret standard for determining independent contractor status,” said Brubeck. “Under the rule’s multifactor test, employers will now be forced to guess which factors should be given the greatest weight in making the determination. Instead of promoting much-needed economic growth and protecting legitimate independent contractors, the final rule will result in more confusion and expensive, time-consuming, unnecessary and often frivolous litigation, as both employers and workers will not understand who qualifies as an independent contractor.

“Regrettably, the confusion and uncertainty resulting from the final rule will cause workers who have long been properly classified as independent contractors in the construction industry to lose opportunities for work,” said Brubeck. “Legitimate independent contractors are a vital part of the construction industry, providing specialized skills, entrepreneurial opportunities and stability during fluctuations of work common to the industry. They play an important role for large and small contractors, delivering construction projects safely, on time and on budget for their government and private customers. This move will jeopardize the ability of construction firms to continue the industry’s longstanding practice of utilizing legitimate independent contractors.”

ABC strongly supported the 2021 final rule, which simplifies and clarifies the factors for determining when a worker is an independent contractor versus an employee under the FLSA. The Biden DOL froze and then rescinded the 2021 rule over the opposition of ABC and other industry associations.

In March 2021, ABC, its Southeast Texas chapter and the Coalition for Workforce Innovation filed suit against the DOL, which remains pending. In March 2022, the U.S. District Court for the Eastern District of Texas dealt a blow to the Biden administration’s efforts to delay and rescind the 2021 independent contractor final rule in that case. Under a decision applauded by ABC, the ABC-supported rule went into effect as scheduled on March 8, 2021.

In October 2022, the DOL announced a new proposed rule to rescind and replace the 2021 final rule and ABC submitted comments in opposition on Dec. 13.

Source: Associated Builders and Contractors