DOL rule proposal could make more workers employees
By Zachary Phillips
Dive Brief :
■ The Department of Labor has proposed a rule change intended to combat employee misclassification . The rule would rescind the 2021 Independent Contractor Rule , which was “ out of sync ” with how courts have decided misclassification cases for decades , said Solicitor of Labor Seema Nanda in a press call Tuesday .
■ Construction — along with healthcare , trucking , retail and food service — is among the industries where the DOL has put emphasis on protecting “ low-wage vulnerable workers ” from misclassification as independent contractors , Principal Deputy Administrator for DOL Jessica Looman said on the call .
■ The shift would return the standard to a six-factor “ totality-of-the-circumstances ” framework , reversing a Trump administration rule that put extra weight on two factors .
Dive Insight :
The Trump administration rule placed more emphasis on two factors : the nature and degree of workers ’ control over their work , and the opportunity for profit or loss based on initiative , investment or both .
Under the DOL ’ s proposed rule , the six factors DOL would consider equally in the assessment of the economic realities of a working relationship include :
■ Opportunity for profit or loss depending on managerial skill .
■ Investments by the worker and the employer .
■ Degree of permanence of the work relationship .
■ Nature and degree of control .
■ Extent to which the work performed is an integral part of the employer ’ s business .
■ Skill and initiative .
The distinction is an important one in construction . Looman said the DOL knows in many cases , individuals are in business for themselves , selling their skills to various employers — a practice that would qualify them as an independent contractor .
10 DITCHMEN • OCTOBER 2022