• Jackson Shields Yeiser

THE DOL’S INDEPENDENT CONTRACTOR RULE IS RESCINDED

Updated: Jun 7

By Paula Jackson

May 27, 2021


The Department of Labor (“DOL”) has withdrawn its employer-friendly Independent Contractor Rule that was supposed to go into effect May 7, 2021.[1] The rule was to assist in clarifying whether a worker is an employee who must be paid minimum wage and overtime under the Fair Labor Standards Act (“FLSA”) or an independent contractor who is not subject to those protections.[2]


The DOL indicated that it withdrew the rule for multiple reasons, including the DOL’s opinion that it conflicted with the FLSA’s purpose, intent, and related judicial precedent by narrowing the considerations for determining whether the worker was an employee or independent contractor.[3] The DOL anticipates that withdrawal of that rule will “avoid a reduction in workers’ access to employer-provided fringe benefits such as health insurance and retirement plans [and]. . . . in other benefits such as unemployment insurance and workers compensation coverage.”[4]


Despite the DOL’s withdrawal of this clarifying rule, the FLSA and its related judicial precedents still define whether a worker is an employee or independent contractor. For guidance on whether workers should be classified as employees or independent contractors, please consult your employment law attorney.


This article is for informational purposes only and is not intended to provide legal or tax advice. Receipt of or viewing information on this web site does not create an attorney-client relationship. You may contact our firm to establish such a relationship, but in any event, please consult an attorney or tax professional of your choosing for advice on this or any other legal topic.


------------------------------------------------------------------------------------------------------------------------------- [1] See “US Department of Labor to Withdraw Independent Contractor Rule,” Department of Labor News Release, https://www.dol.gov/newsroom/releases/whd/whd20210505(last checked May 27, 2021). The rule was published in January 2021 with its effective date established as March 8, 2021, but the DOL later announced its delayed effective date of May 7, 2021. See “Final Rule: Independent Contractor Status under the Fair Labor Standards Act,” Department of Labor https://www.dol.gov/agencies/whd/flsa/2021-independent-contractor (last checked May 27, 2021). Our firm previously posed two articles about this Rule that have since been removed.

[2]See “Final Rule: Independent Contractor Status under the Fair Labor Standards Act,” Department of Labor https://www.dol.gov/agencies/whd/flsa/2021-independent-contractor (last checked May 27, 2021). [3] See “US Department of Labor to withdraw Independent Contractor Rule,” Department of Labor News Release, https://www.dol.gov/newsroom/releases/whd/whd20210505 (last checked May 27, 2021). [4]See id.

3 views0 comments