DOL Withdraws Independent-Contractor Rule

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DOL Withdraws Independent-Contractor Rule

By Lisa Nagele-Piazza, J.D., SHRM-SCP
May 5, 2021

The U.S. Department of Labor (DOL) is officially withdrawing the prior administration's independent-contractor rule, which would have made it easier for businesses to classify workers as independent contractors rather than employees.

"The department believes that the rule is inconsistent with the [Fair Labor Standards Act's] FLSA's text and purpose and would have a confusing and disruptive effect on workers and businesses alike due to its departure from longstanding judicial precedent," according to the DOL's announcement on May 5.

Under the FLSA, employees are entitled to minimum wage, overtime pay and other benefits. Independent contractors are not entitled to such benefits, but they generally have more flexibility to set their own schedules and work for multiple companies.

We've gathered articles on the independent-contractor rule from SHRM Online and other trusted media outlets.

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This is what they're talking about:

Workers Comp

OSHA general duty clause citation upheld in tow truck driver’s death

Gloria Gonzalez
May 09, 2019

An administrative law judge of the Occupational Safety and Health Review Commission upheld a general duty clause citation against an automotive garage and towing service company after a tow truck driver was fatally injured when he was pinned between the bed of a tow truck and an off-loaded vehicle.

The U.S. Occupational Safety and Health Administration inspected Johnstown, Pennsylvania-based Berkebile Auto Service Inc. as a result of the fatal injury and issued a one-item citation and penalty notice on May 5, 2017, to the company for violating the Occupational Safety and Health Act’s general duty clause, according to review commission documents published Thursday. The citation alleged that the tow truck driver was not protected from the crushing hazard in the area between the tow truck and the off-loaded towed vehicle.

The company filed a timely notice of contest, with the key issues in dispute being whether it was an employer under the statute, whether there was a violation of the general duty clause and whether there was unpreventable employee misconduct related to the alleged violation. But the law judge found the company to be an employer within the meaning of the statute, affirmed the general duty clause citation and assessed a $3,803 penalty.

The owner argued that the fatally injured driver leased the tow truck from his company and was not an employee, but the law judge found that the company had “general control over the drivers’ means and manner to accomplish the work,” including through its towing contracts, the tools used for towing services, service call assignments, the non-negotiable rate of a driver’s pay, limits on the use of “leased” tow trucks, the prohibition of driver advertising or self-promotion, and the initial two-week ride-along training of drivers, according to the decision. The owner also negotiated the terms of the towing contracts between BAS and its client companies, each driver’s payment from BAS was based upon the towing rates established in these contracts and the drivers had no input into the fee structure or other contract terms.

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