House Panel Passes Bill to Quash DOL Independent Contractor Rule

The calls for court intervention are based on worries that certain workers' longstanding use of independent contractor status could be jeopardized or made significantly more costly for employers under the new ruleset. The opposition also argues many workers value their independent contractor status and do not want to be considered normal employees, and that the execution of normal work duties could inadvertently create confusion with respect to worker compensation and classification issues.

Summarized simply, the new independent contractor rules require a "multifactor analysis" to determine a worker's status, similar to those used by courts for decades to ensure that "all relevant factors are analyzed to determine whether a worker is an employee or an independent contractor." Leaders at the Labor Department have said this stricter approach is necessary to avoid abuse of workers and the improper avoidance of payroll taxes.

The text of the rule addresses six factors that guide the analysis of a worker's relationship with an employer. They include any opportunity for profit or loss a worker might have; the financial stake and nature of any resources a worker has invested in the work; the degree of permanence of the work relationship; the degree of control an employer has over the person's work or whether the work the person does is essential to the employer's business; and a factor regarding the worker's skill and initiative.

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