Department of Labor to Update Independent Contractor Rules

September 28, 2018

U.S. Labor Secretary Alex Acosta says the Department plans to update the regulations governing gig economy workers and independent contractors.

“How we approach work is changing,” Secretary Acosta said to the media this week.  “We need to start looking at our rules and recognize that what fit 20 or 30 years ago is not going to fit for the modern workplace.”

Joint employer then independent contractors: “Right now we’re focusing on [a joint employment rule] and then we’ll look at the classification issue as well,” Acosta said.

A new DOL rule would clarify and standardize the various circuit court tests for who is, and is not, an independent contractor under federal law, but it would not impact tests used under state laws, such as California’s recent ABC test in the Dynamex decision.

Acosta views Congress addressing the issue as the “ultimate solution,” but he is prepared to move forward if policymakers fail to act.  Last year, the House passed an HR Policy-backed joint employer bill (H.R. 3441) but the Senate has not moved on the measure.

Outlook:  With overtime and joint employment rulemakings ahead of independent contractors in the DOL regulatory queue, we are not likely to see a proposed rule on gig economy workers until late 2019.