Appeals court decision may delay new independent contractor rule

The latest iteration of the Department of Labor’s (DOL) independent contractor regulation was scheduled to become effective on March 11, 2024, ending this phase of one of the longest, most convoluted regulatory conflicts. The new rule would make it a great deal more difficult for employers and employees to know whether workers should be classified as employees or independent contractors. In an unpublished order on February 19, however, the U.S. 5th Circuit Court of Appeals resurrected an earlier challenge to the first Biden administration rule and sent it back to the district court. Although the immediate effect may be to accelerate the  adjudication of the new regulation, the presiding district court judge set the proposed rule aside once before and may do so again.

Labored history

During the Obama administration, Wage and Hour Division (WHD) Administrator David Weil proposed a number of measures designed, he maintained, to update workplace laws to better reflect the economic realities of the 21st Century workplace. The end result of his proposals—which never went into effect—would have been to radically limit the number of independent contractors and, thus, increase the number of workers who would enjoy the legal benefits and protections of “employee” status (overtime, right to unionize, coverage under Social Security, Title VII protections, et al.)