Who is an employee? DOL to weigh in

In early March, the Biden administration formally withdrew the frozen independent contractor regulation and the judicially rejected joint employer regulation, clearly indicating that new positions would be forthcoming from the U.S. Department of Labor (DOL) soon in these hotly contested areas of employment law.

Independent contractors

The independent contractor issue has gained new significance in light of the recent passage of the Protecting the Right to Organize (PRO) Act by the House. Among its many prounion provisions is one that adopts California's controversial "ABC" test from the state's AB5, which strictly defines and limits those who can be considered independent contractors and would broadly expand the number of "employees" who could then be organized by unions and would be subject to all the labor and employment laws such as minimum wage and overtime.

There is strong opposition to the PRO Act in the Senate. As a result, there has been considerable speculation that the Biden administration will seek to achieve by regulation what it could not achieve by legislation.

Employers can expect these regulations to be even more employee-oriented than the Wage and Hour Advisory Interpretation issued during the Obama administration. The mixed success of AB5 may also serve as a moderating influence on the DOL's drafters. The recent ruling by the UK's Supreme Court, declaring that Uber drivers are employees, may be a harbinger of a widespread reexamination of this subject. Whatever the DOL proposes will not be the final word, as any proposal will be challenged in the courts.

Joint employers