Labor Department Seeking Public Input on Independent Contractor Status Rulemaking

Labor
Contacts: Brad Mannion
bmannion@nahb.org
(202) 266-8265

David Jaffe
djaffe@nahb.org
(202) 266-8317

Published

The U.S. Department of Labor (DOL) recently announced plans to engage in a rulemaking related to determining the status of a worker as either an employee or independent contractor under the Fair Labor Standards Act (FLSA).

DOL wants to hear from workers and employers as it develops its proposal and will hold public forums this month to hear diverse perspectives from those who may be affected by employee or independent contractor classification.

  • Employer Forum: June 24, 2:30–4:30 p.m. ET - RSVP here
  • Worker Forum: June 29, 5–7 p.m. ET - RSVP here

NAHB supports enforcement of the rules on the classification of workers, but also supports clarification of those rules to improve compliance across all industries.

Consequently, NAHB supports the current rule adopted by DOL on Jan. 7, 2021, providing a sharper "economic reality" test to determine a worker’s status under the FLSA as an employee or an independent contractor.

NAHB believes this rule provides a clearer and simpler federal test for determining worker status for regulated employers and small businesses, including home builders and specialty trade contractors who are essential to the residential construction sector.

After the change in White House administrations, the DOL withdrew the rule on May 6, 2021, believing that it was inconsistent with the FLSA’s text and purpose.

But on March 14, 2022, a U.S. District Court stopped DOL's move to delay and withdraw the new rule, delivering a victory for businesses. The court determined that the prior administration’s rule took effect as of its original effective date, March 8, 2021, and remains in effect until DOL issues a new rule through regular rulemaking processes.

The forums scheduled for late June are the first step in that rulemaking process. NAHB members are encouraged to participate in the forums and provide their perspectives on working as or hiring independent contractors.

Once a rule is proposed, DOL will have a notice and comment period for interested parties to provide feedback on the proposal. NAHB plans to submit comments.

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