The U.S. Department of Labor last week finalized a rule revamping guidance on whether a worker should be classified as an employee or an independent contractor. The rule rescinds a 2021 standard enacted in the closing days of the Trump Administration.
The new standard makes it harder for an employer to classify workers as independent contractors and lays out a series of factors to determine an appropriate classification.
Why it matters: Independent contractors, unlike employees, are not subject to a host of benefits such as unemployment insurance, overtime, or workers’ compensation. The new rule will require employers to extend these benefits to more workers.
What they’re saying: Business groups panned the new rule, with the U.S. Chamber of Commerce saying the rule “threatens the flexibility of individuals to work when and how they want and could have significant negative impacts on our economy.”
Workers’ rights groups applauded the rule. The National Employment Rights Project called it “a significant step forward in ensuring all people who work for someone else—regardless of who they are, where they work, or what they do—have access to our foundational minimum wage and overtime protections.”
Minnesota angle: Attorney General Keith Ellison launched an Advisory Task Force on Worker Misclassification tasked with making recommendations to the legislature and state agencies on how to ensure workers are properly classified. The Task Force held its most recent meeting last week.
Source : Park Street Public.