Employees have many legal protections that independent contractors simply do not get, including health insurance, paid sick days, overtime, disability plans, retirement benefits, occupational safety laws, and anti-discrimination safeguards. Recognizing the hardship that an individual may face when they are wrongly misclassified as an independent contractor instead of an employee, the United States Department of Labor on May 5, 2021, announced that it is rescinding a Trump-Era rule that made it harder for gig and contract workers to argue that they are entitled to employee protections. The withdrawal of the “Independent Contractor” rule will become effective on May 6, 2021.
Labor Secretary Marty Walsh announced, “by withdrawing the Independent Contractor Rule, we will help preserve essential worker rights and stop the erosion of worker protections that would have occurred had the rule gone into effect . . . Legitimate business owners play an important role in our economy but, too often, workers lose important wage and related protections when employers misclassify them as independent contractors. We remain committed to ensuring that employees are recognized clearly and correctly when they are, in fact, employees so that they receive the protections the Fair Labor Standards Act provides.”
The Trump administration rule finalized in early 2021 raised the bar for contractors to prove they have been misclassified, placing particular emphasis on an examination of the “worker’s opportunity for profit or loss.” The announcement withdrawing that rule gives individuals a greater opportunity to seek redress for being misclassified as an independent contractor.
If you would like a consultation to help evaluate whether you have been misclassified as an independent contractor, please contact attorney Noah Hurwitz.