The U.S. Department of Labor announced today that they are fully withdrawing the implementation of the final rule on Independent Contractors effective May 6th. In its press release, the DOL stated it is withdrawing the rule for several reasons, including:
- The IC rule was inconsistent with the FLSA’s text and purpose, as well as, relevant, longstanding judicial precedent.
- The rule’s prioritization of two “core factors” for determining employee status under the FLSA would have undermined the longstanding balancing approach of the economic realities test and court decisions requiring a review of the totality of the circumstances related to the employment relationship.
- The rule would have narrowed the facts and considerations comprising the analysis whether a worker is an employee or an independent contractor, resulting in workers losing FLSA protections.
The DOL did not indicate if they plan to announce a new independent contractor rule in the future.