top of page

NEWS | DOL Proposes New Employee/Contractor Classification Rule

Employees v. Contractors – the DOL is weighing in once again.

On Oct. 11, the U.S. Department of Labor (DOL) once again proposed a rule to challenge how companies are able classify workers which have typically been considered independent contractors. A change in classification from independent contractor to employee would expand the benefits and labor rules for employers.

Per the DOL, several factors are evaluated to determine whether workers must be considered employees, including workers’ opportunity for profit or loss, permanency of their jobs, and degree of control a company exercises over a worker, to name a few of the criterion.

DOL Secretary Marty Walsh said the proposed changes in standards for classification protect vulnerable workers and suggested employers frequently misclassify these workers as independent contractors.

Amending the current economic-reality evaluation standard could limit the ability of workers who have their own business to increase their income through taking entrepreneurial initiative or an ability to work for competing companies. The DOL’s proposed rule reverses the standard implemented during the Trump administration and will take several months to gather input from stakeholders and review and finalize.

NSBA has repeatedly urged DOL to proceed with caution when it comes to the burden this rule will place on small businesses as well as its potential to hurt workers looking to preserve their independent status and flexibility.

Please click here to read the proposal. Stay tuned to NSBA for opportunities to make your voice heard on this proposed regulation.


bottom of page