DOL Seeks Comment on Proposed Rule for Classifying Contractors and Employees

October 21, 2022

DOL Seeks Comment on Proposed Rule for Classifying Contractors and Employees

The Department of Labor (DOL) is seeking comments regarding a proposed rulemaking that would make it more difficult for corporations and associations to classify some workers as independent contractors.

The proposed rule would consider a number of factors in assessing workers’ roles, including whether they use specialized and/or managerial skills, perform an integral function, work on a permanent basis, or have made certain investments in the business. DOL additionally would evaluate a worker’s degree of control over the performance of the work, among other factors.

If enacted, the new rule would upend a 2021 rule currently in place that focuses on workers’ degree of control and opportunity to profit or lose money in conjunction with the work as the primary factors for determining whether or not they are employees.

For corporations and associations, the proposed rulemaking is a reminder to ensure that their workers are classified correctly, and a harbinger that workers who qualify as contractors under the current DOL test may be seen as misclassified under the newly proposed test. DOL said the proposed rule is designed “to combat employee misclassification,” which it characterized as hurting the economy and denying workers labor protections and rightful wages.

Comments on the proposed rule are due November 28, 2022.

If you have any questions and/or are interested in filing a comment with DOL, please contact Rich Bar at rbar@gkglaw.com or John Kester at jkester@gkglaw.com.