The Biden administration has started the process to formulate a new definition of independent contractors under the Fair Labor Standards Act.
“For too many workers, misclassification causes lost wages, benefits, unemployment insurance and workers’ compensation coverage,” Looman wrote. “Even if they recognize that they are misclassified, many employees may be afraid to assert their employment rights because of retaliation.”
Looman said the Department of Labor is planning a formal rulemaking on a new independent contractor status definition to be used by WHD.
Labor law attorneys have said the definition is highly significant and generally sets the standard for most companies that want to avoid an action brought against it by an employee before WHD.
“We remain committed to ensuring that employees are recognized correctly when they are, in fact, employees so that they receive the protections the FLSA provides,” Looman wrote. “At the same time, we recognize the important role legitimate independent contractors play in our economy. We need to hear from workers and employers as we develop our proposal.”
