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Capitol Correspondence - 03.09.21

DOL Finalizes Independent Contractor Rule Delay to May 7

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The U.S. Department of Labor followed up on its earlier proposal to delay the implementation of the Independent Contractor rule, officially finalizing the delay to May 7, 2021. As explained in the announcement:

“In the NPRM, the Department explained that delaying the effective date of the Independent Contractor Rule would give the Department additional opportunity to review and consider the Independent Contractor Rule, as the Regulatory Freeze Memorandum and OMB Memorandum M-21-14 contemplate. The Department noted that the Independent Contractor Rule would be its first generally applicable regulation addressing the question of who is an independent contractor and thus not an employee under the FLSA, and would adopt a new legal standard for determining employee and independent contractor status under the FLSA. In light of the significance of this change, the Department proposed to allow itself more time to further review and consider, among other important issues, the legal, policy, and/or enforcement implications of adopting that standard, such as: whether the January 2021 Rule effectuates the FLSA’s purpose, recognized repeatedly by the Supreme Court, to broadly cover workers as employees; the costs and benefits attributed to the January 2021 Rule, including the assertion that workers as a whole will benefit from the January 2021 Rule; and/or whether the January 2021 Rule’s explanation of the standard provides clarity for stakeholders and for the purposes of enforcement, as was intended.”