DOL Issues Draft Independent Contractor Rule

The Department of Labor (DOL) recently released a proposal that would clarify whether workers are independent contractors or employees under federal minimum wage and overtime law. 

The proposed rule, which is expected to be published in the Federal Register by early next week, would create an "economic realities" test to determine independent contractor status under the Fair Labor Standards Act. Specifically, the test created under the proposal would weigh whether workers are economically dependent on an employer or in business for themselves by analyzing how much control workers have over their job duties and their opportunities for profit or loss. If a worker's status is still unclear after reviewing those factors, the test then considers the skill required for the job, "the degree of permanence of the working relationship" and if the work is "part of an integrated unit of production." 

The Obama administration clarified the rule in a 2015 guidance document, in an effort aimed at limiting the misclassification of employees as independent contractors. However, businesses argued that the Obama DOL’s interpretation of the law would increase litigation against employers. The Trump administration withdrew the guidance in June 2017. 

Senior administration officials indicated this September 24th that they plan to finalize the rule before the end of the year. But the timing of the rule would make it vulnerable to repeal under the Congressional Review Act if Democrats were to win the White House and take control of the Senate. 

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About NERCA

NERCA is the founder of the NEREF scholarship. They are the regional association for roofing contractors covering the northeast part of the country.  Their territory includes: Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont and Delaware.

NERCA maintains relationships with national organizations like the National Roofing Contractors Association (NRCA) and other major roof industry players. They also host one of the largest regional trade show’s in the country. Forms are available to become a member! If you need more information you can contact the association office!

Source: NERCA Newsletter