About the Rule
WASHINGTON, D.C. – Today, the Department of Labor released their final rule concerning the definition of Independent Contractor Status under the Fair Labor Standards Act (the “FLSA” or the “Act”), 85 Fed. Reg. 60600 (Sept. 25, 2020).
The Department’s first of its kind final rule modernizes the “economic realities” test to define whether a worker should be classified as an independent contractor. The Coalition for Workforce Innovation (CWI) strongly supports the final rule as an important step in providing needed clarity to businesses and independent workers in structuring and maintaining their relationships. As technology continues to improve by connecting people with opportunities to leverage their own capital, expertise, and other resources, the Department’s fresh and leading look at this policy will help to fully realize the macroeconomic benefits of independent work across the economy.
“This rule comes at a critical time in our economy. Millions of workers have been displaced by the pandemic and are finding independent work to provide new and critical alternatives for economic stability. This rule is vital to enable Americans to utilize their skills and thrive as an independent worker in what is emerging as the new economy,” said Carl Camden, founder and President of the Association of Independent Workers (IPSE-US).
“Since the COVID-19 pandemic began, millions of Americans have relied upon essential gig economy workers to deliver meals and groceries and provide transportation for necessary trips to help them remain socially distant. Many people have found opportunity in gig economy jobs and the flexibility they need to earn a living or generate extra income in a way that allows them to decide when and how to work. TechNet applauds today’s Department of Labor rule that will allow workers to be properly classified so consumers can continue to receive essential goods and services and workers can continue earning the income they need,” said Linda Moore, President and CEO, TechNet.
“The Coalition for Workforce Innovation looks forward to working with President Elect Biden and his incoming Administration on a modern approach to independent work and encourages the formal adoption of this updated standard, so all stakeholders have the needed clarity under the law. Modernizing the economic realities test, which is the crux of this rule, is urgently needed as COVID has wreaked havoc on jobs and required employers to reimagine how they meet new needs of customers. We implore the Biden Administration to review the final rule objectively and hope to see it implemented as soon as possible,” said Evan Armstrong, VP, Workforce, Retail Industry Leaders Association.
To view CWI’s comments to the DOL, click here.
The Coalition for Workforce Innovation brings together diverse stakeholders representing technology companies, worker advocates, retail, and service industries, to educate policymakers on the benefits of independent work and to support policy proposals that protect and empower individuals to choose nontraditional work arrangements.