Independent Contractor Status Remains Issue of Concern

| Apr 15, 2021 | Business Formation & Planning |

 

Over the last few years employers in California have often found themselves considering the state’s independent contractor rules. Ever since the Supreme Court’s decision in Dynamex the issue has been in flux. However, with the changes to the law since then, along with the successful proposition initiative from companies like Uber last November, the issue has started to find some clarity.

However, on the federal level questions remain. As with any change in administration many rules are re-examined and either changed or nixed. Shortly before leaving office, the Trump administration issued a final rule that would have made it easier for employers to classify workers as independent contractors.

Along with so many other things, the Biden administration took office and chose not to proceed with this rule. The rule’s implementation was initially delayed. The administration then formally withdrew the rule and its change to the definition of independent contractor under the Fair Labor Standards Act.

Of course, things have not ended there. On March 26, 2021, business groups filed a complaint challenging the Biden administration’s decision on the rule. These groups essentially argue that the administration did not follow proper protocols, including providing for a meaningful comment period, before withdrawing the rule. While the complaint may delay the ultimate decision, it appears likely that the Trump administration rule will not take effect under a Biden presidency, leaving the federal standard for employers to classify workers as independent contractors more stringent than it otherwise would have been.

With the constant changes that can impact a business, an experienced legal team can help navigate a difficult time for businesses, particularly with the ever-changing landscape for companies during the current crisis.