REGULATORY ACTION CENTER FILES COMMENT IN DOL INDEPENDENT CONTRACTOR RULEMAKING

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On December 13, 2022, FreedomWorks Foundation’s Regulatory Action Center (RAC) submitted a comment concerning the Department of Labor’s (DOL) proposed independent contractor rule. Activists submitted 749 individual comments.

The rule provides guidelines for determining whether someone is an employee or independent contractor under the Fair Labor Standards Act (FLSA). Independent contractors are not employees under the FLSA and thus not subject to minimum wage, overtime pay, and recordkeeping requirements.

In opposing the proposed rule, the RAC argued that the Biden DOL’s proposal would bring back uncertainty to the regulated community as to whether a worker is an employee or an independent contractor. The proposed rule would abandon the clarity of the Trump administration’s 2021 rule, which provided predictability to businesses and encouraged innovation and flexibility in the economy. The Biden proposal would upend the convenience and flexibility of independent contractors–and force most workers into a one-size-fits-all employee mode.

Workers opt to be independent contractors so they can set their own schedules–to pick up their children from school, to care for their elderly parents, to take classes to advance their education or job prospects, or simply to work only when they feel like it.

Forcing app-based services such as Uber, Lyft, and DoorDash to treat all their drivers as employees, instead of independent contractors, will dramatically increase the price of a ride and food delivery. It will eliminate the flexibility that the drivers have to set their own schedules and create a mountain of bureaucratic red tape. If Biden’s proposal is adopted, many freelance workers–including journalists, photographers, hairdressers, nail technicians–will lose their jobs. 

In this time of economic uncertainty and rampant inflation, workers need more opportunities to earn a living–not fewer. Small businesses, already devastated by COVID closures, need the flexibility to hire independent contractors to help their businesses recover. But in order to do that, businesses need the clear guidance the 2021 rule provided. And workers need not be locked into independent contractor status. That there are more than 10 million job openings in the U.S. indicates that workers who want to be employees rather than independent contractors have ample opportunities for employment. For those who want or need the flexibility or freedom that being an independent contractor allows, however, the government should not stand in the way.

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