Changes in overtime exemptions and independent contractor status are on hold.
Throughout June, the U.S. Department of Labor (DOL) has issued a number of notices delaying implementation of final rules.
Independent Contractor Rule
Originally due this summer, the DOL announced on June 9 that its final rule addressing the standard for determining if a worker is an employee or independent contractor under the Fair Labor Standards Act (FLSA) will not be ready for publication until at least October.
The rulemaking is expected to rescind a Trump-era rule utilizing a multi-factor test that evaluates how much control workers have over their job duties and their opportunities for profit or loss when determining whether a worker is an employee or an independent contractor.
NSBA is continuing to work with the small-business community and our members to help facilitate broader depictions of impacts of this pending proposed rule change.
RELATED NEWS | DOL Independent Contractor Rule Update
Overtime Pay Rule
At the urging of more than 100 national-level advocacy organizations, including NSBA, the DOL is also extending the target date for release of the proposed rule on overtime pay exemptions to August.
In Fall 2021, the DOL announced its plan to issue a Notice of Proposed Rulemaking (NPRM) to change overtime requirements and exemptions for certain categories of employees under the FLSA. Applicable to bona fide executives, administrative officials and other professional employees, the changes to these so-called “white collar” categories of employees would disrupt a vulnerable economy still recovering from the effects of COVID 19 and unprecedented supply chain disruptions spanning the pandemic.
For some context, to comply with DOL’s expected new overtime regulations, employers will be obligated to monitor non-exempt employees’ worktime, but that may not be compatible in today’s new workforce dynamics. Consequently, changes to the white-collar exemptions may leave many workers unable to enjoy the part-time or remote work that many people have come to enjoy since COVID.
With the NPRM postponed, extra time will allow the American workforce employer community, and DOL itself to more fully understand how the pandemic has shifted the paradigm of work in America before implementing changes to rules amended less than three years ago.
Follow NSBA as we continue to monitor these NPRMs for independent contractor statuses and overtime regulations, and share your perspective on how these rule changes would affect your small business in our Action Center.