USDOL Proposes Withdrawal of Joint Employer and Independent Contractor Final Rules

On March 11, 2021, the U.S. Department of Labor (USDOL) issued Notices of Proposed Rulemaking (NPRs) to rescind two final rules published during the prior administration which the current administration believes would weaken protections afforded to American workers under the Fair Labor Standards Act (FLSA).

  • The Independent Contractor Final Rule, currently scheduled to take effect May 7, 2021, focuses on an “economic reality” test to determine a worker’s economic dependence from the potential employer; core factors of the test are the worker’s nature and degree of control over the work, and opportunity for profit or loss based on initiative and/or investment.
  • The Joint Employer Final Rule, which took effect in March 2020, provides a four-factor balancing test for determining FLSA joint employer status in situations where an employee performs work for one employer that simultaneously benefits another entity or individual.*

The USDOL’s proposed withdrawals are open for public comment at through April 12, 2021.

*See August 8, 2021 update on rescission of Joint Employer 2020 rule.