USDOL Withdraws Independent Contractor Rule

Effective May 6, 2021, the U.S. Department of Labor (USDOL) withdrew the independent contractor rule published by the prior administration in the Federal Register on January 7, 2021, then delayed by the current administration on March 7, 2021 (see our previous post).

The USDOL cited the following reasons for the withdrawal:

  • Inconsistency with the FLSA’s text and purpose
  • Limitations on the factors used to apply the economic reality test to determine whether workers are independent contractors or employees
  • Narrowing of the factors used to analyze whether workers are independent contractors or employees, potentially resulting in workers losing FLSA protections

Read the withdrawal rule here.