Update On DOL’s New Independent Contractor Rule

The Department of Labor’s (DOL) new rule that changes the test used to determine whether a worker is an independent contractor goes into effect today, March 11, 2024. As we discussed in January, the new rule makes it more difficult to lawfully classify a worker as an independent contractor. 

The rule is being challenged in several lawsuits. For example, freelance writers have sued in Tennessee and Georgia, arguing that the DOL violated the Administrative Procedure Act when it enacted the rule. They also contend that the DOL exceeded its authority under the Fair Labor Standards Act. Another lawsuit challenging the new rule has been filed by a transportation company in Louisiana. Unfortunately, given the procedural posture of these cases, it is highly unlikely that any of these lawsuits will keep the rule from taking effect. 

Resolutions have been introduced in both the U.S. House of Representatives and the U.S. Senate to overturn the DOL’s new rule. While these efforts by Representative Kevin Kiley, R-Calif. and Senator Bill Cassidy, R-La. are commendable, if such a resolution were to pass, a presidential veto is possible.   

If any of these challenges to the DOL’s new rule gain traction, we will let you know. As always, KZA attorneys are available to assist you in analyzing whether workers can be lawfully classified as independent contractors.

KZA Employer Report articles are for general information only; they are not intended and should not be construed to be legal advice. Reading or replying to such articles does not establish an attorney-client relationship. In addition, because the subject matters and applicable laws discussed in Employer Report articles are often in a state of change and not always applicable to every type of business entity or organization, readers should consult with counsel before making decisions based on the same.