The Department of Labor (DOL) announced a proposed rule that would revise how to determine if an individual is an independent contractor or an employee entitled to minimum wage, overtime and other protections under the federal Fair Labor Standards Act (FLSA). The proposal would rescind the 2021 Trump administration rule (GRIST) and create a framework that is “more consistent with longstanding judicial precedent on which employers have relied to classify workers as employees or independent contractors under the FLSA,” says DOL. Comments on the proposal can be submitted until Nov. 28, 2022.
Gig companies (ride-share, construction trucking and other industries) were concerned about the impending proposal’s effect on their businesses, but the changes do not appear to be as significant as anticipated. For example, Uber reportedly said DOL “listened to drivers, who consistently and overwhelmingly state that they prefer the unique flexibility that comes with being an independent contractor” and the proposal takes a “measured approach essentially returning us to the Obama era, during which our industry grew exponentially.” In addition, Lyft said, “there is no immediate or direct impact on the Lyft business at this time.”