DOL to Rescind Independent Contractor and Joint Employer Rules under FLSA

March 11 the Department of Labor (DOL) announced plans to rescind two substantial Trump-era DOL Wage and Hour Division (WHD) regulations.

The independent contractor rule under the Fair Labor Standards Act (FLSA) was finalized on January 7, 2021. DOL has proposed rescission on the grounds that the standard does not have a legal basis, does not provide intended clarity, has questionable costs and benefits, and because it has not yet taken effect.

The FLSA joint-employer rule took effect in March 2020, but it was subsequently vacated by a federal district judge in New York. The rule had established a straightforward four-factor test for determining joint-employer status. DOL has proposed rescission to complete additional legal analysis.

Comments on both proposals are due by April 12, and the DOL is anticipated to likely advance additional rulemakings dealing with these regulatory policies in the future.

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