Status
On March 25, 2024, the U.S. House of Representatives Committee on Education and the Workforce passed H.J. Res. 116, the Congressional Review Act resolution introduced by Rep. Kevin Kiley, R-Calif., providing for congressional disapproval of the rule submitted by the U.S. Department of Labor relating to Employee or Independent Contractor Classification Under the Fair Labor Standards Act , in a 21-13 vote. ABC sent a letter in support of the resolution to the committee ahead of the vote, urging members to report it for a full house vote. ABC also sent a letter to all members of the House and U.S. Senate urging them to pass the CRA to nullify the DOL’s rule, which went into effect on March 11.
On March 5, ABC, its Southeast Texas chapter, the Coalition for Workforce Innovation and five other organizations filed an amended complaint in the U.S. District Court for the Eastern District of Texas, arguing that the 2024 independent contractor final rule is unlawful and a violation of the Administrative Procedure Act. “Replacing the commonsense 2021 final rule was the wrong move by the DOL and has created an ambiguous standard for determining employee or independent contractor status under the Fair Labor Standards Act,” said ABC in the business coalition’s statement.
In January, ABC, its Southeast Texas chapter, CWI and the Financial Services Institute filed a motion in the U.S. Court of Appeals for the Fifth Circuit requesting that it lift the stay of appeal and remand the case to the U.S. District Court for the Eastern District of Texas so that the district court may consider whether the 2024 final rule complies with the APA in its attempt to rescind and replace the current 2021 final rule. In 2022, the district court found that the DOL violated the APA when it first attempted to delay and later withdraw the 2021 final rule. The court vacated these efforts. “The Biden administration cannot be allowed to undermine flexible work opportunities for millions of Americans who choose to work independently,” said ABC in the business coalition’s statement.
On Jan. 9, the DOL announced the independent contractor final rule, which rescinded the ABC-supported 2021 final rule and replaced it with a confusing multifactor analysis to determine whether a worker is an employee or an independent contractor. Immediately following the release of the final rule, ABC issued a statement opposing it, saying that "it will cause workers who have long been properly classified as independent contractors in the construction industry to lose opportunities for work.”
DOL resources on the final rule:
To learn more about the rule, watch the ABC-members only archived webinar in the Academy, "Learn What the DOL's Final Independent Contractor Rule Means for ABC Members."
Desired Outcome
The 2024 final independent contractor rule is confusing, vague and unworkable. It will harm construction workers classified as legitimate independent contractors because they will lose crucial opportunities for work. Further, the difficult-to-interpret standard strips independent contractors of basic freedoms and rights to choose how they work.
ABC is pleased the House Committee on Education and the Workforce advanced the resolution to nullify the DOL’s independent contractor rule and prevent the promulgation of a similar rule in the future. ABC urges members of the House and Senate to pass the CRA.