SWACCA Prevails in Multi-Year Campaign with Release of Labor Department’s Final Rule on Independent Contractor Status That Cites Approvingly to SWACCA’s Regulatory Advocacy
Today, SWACCA achieved a significant advocacy victory as the U.S. Department of Labor submitted for publication the text of its final rule for determining when a worker is an employee or an independent contractor for purposes of federal wage and hour law. This change made it easier to classify workers in construction (and some other industries) as independent contractors instead of employees—especially if they got their work through an online platform.
SWACCA’s advocacy team has been engaged on this issue since the previous Administration issued a revised interpretation of these standards favored by Associated Builders and Contractors that broke with decades of longstanding regulatory guidance. SWACCA helped to persuade the Labor Department to rescind these prior rules and has advocated for over three years to have the Labor Department finalize this new rule reinstating the longstanding six-factor “totality of the circumstances” test developed by well-understood federal court decisions.
SWACCA’s multi-year advocacy campaign on this issue included numerous communications with regulators and legislators, as well as substantive comments that the Department of Labor relied on in finalizing the regulations. In the final rule, the Labor Department cites SWACCA by name eight times in adopting arguments our advocacy team pressed to justify the final rule. These include SWACCA’s arguments about the legal infirmities of the prior regulations, the toll misclassification takes on honest construction employers and their workforce, the relative balance of benefits over costs from the rule, and the specific benefits to the industry of reverting back to the six-factor test.
The final rule will publish in the Federal Register on Wednesday January 10, 2024 and is effective March 11, 2024. The text of the pre-publication version of the final rule is available here and a series of FAQs the Labor Department released on the final rule are available here.
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