Murray, Colleagues Applaud Biden Admin Independent Contractor Rule for Restoring Key Protections for Workers

(Washington, D.C.) – Today, U.S. Senator Patty Murray (D-WA), Chair of the Senate Committee on Health, Education, Labor, and Pensions (HELP), led 11 of her colleagues in sending a comment letter applauding the Biden Administration’s proposed employee and independent contractor classification rule, which reinstates the Department of Labor’s (DOL) longstanding economic realities test to restore protections for all workers covered by the Fair Labor Standards Act (FLSA) and ensure employers don’t misclassify them and deny them workplace rights.

“By restoring and codifying the longstanding economic realities test, this rule will protect workers against misclassification and even the playing field for businesses that properly classify their workers,” wrote the Senators. “Accordingly, we strongly support the DOL’s proposed rule and urge the Department to finalize it.”

In the letter, the Senators underscored that the Biden administration’s proposed rule will help limit employee misclassification, protecting workers’ rights and more closely aligning with both congressional intent and Supreme Court jurisprudence after the Trump administration weakened protections against worker misclassification.

“We support DOL’s proposal to reinstate the economic realities test to more closely align with congressional intent and Supreme Court jurisprudence,” wrote the Senators in their letter. “The return to this test, which was in place for more than seven decades, will help ensure that all workers who are covered by the Fair Labor Standards Act’s (FLSA) legal protections, including minimum wage and overtime, are not deprived of its protections by misclassification. The proposed rule will help limit employee misclassification by providing more clarity to workers and employers about their rights and responsibilities under the law.”

The comment letter, led by Senator Murray, was also signed by Senators Casey, Schumer, Cardin, Booker, Murphy, Smith, Whitehouse, Wyden, Reed, Blumenthal, and Brown.

Senator Murray has long led efforts in Congress to shield against employee misclassification and protect workers’ rights. In 2007, she introduced The Independent Contractor Proper Classification Act to protect against employee misclassification. More recently, she has fought to pass—and is the lead Senate sponsor of—the Protecting the Right to Organize (PRO) Act, which, among other things, would close loopholes that allow employers to misclassify their employees and deny them protections under the law.

The Senators’ full letter is available HERE and below:

The Principal Deputy Administrator Jessica Looman

U.S. Department of Labor

200 Constitution Avenue, N.W.

Washington, D.C. 20210

RE: Comments on the Notice of Proposed Rulemaking, RIN 1235-AA43, Employee or Independent Contractor Classification Under the Fair Labor Standards Act

Dear Principal Deputy Administrator Jessica Looman:

We write to offer comment on the Department of Labor’s (“DOL”) October 13, 2022 Notice of Proposed Rulemaking on the Employee or Independent Contractor Classification Under the Fair Labor Standards Act (“the proposal”).^[1] We support DOL’s proposal to reinstate the economic realities test to more closely align with congressional intent and Supreme Court jurisprudence. The return to this test, which was in place for more than seven decades, will help ensure that all workers who are covered by the Fair Labor Standards Act’s (FLSA) legal protections, including minimum wage and overtime, are not deprived of its protections by misclassification. The proposed rule will help limit employee misclassification by providing more clarity to workers and employers about their rights and responsibilities under the law.

Rescinding the 2021 Independent Contractor Rule (2021 IC Rule) and formally reinstating the

economic realities test through rulemaking is fundamental to Congress’ goals in passing the FLSA because only employees under the Act are covered by its protections. Congress enacted the FLSA to end “labor conditions detrimental to the maintenance of the minimum standard of living necessary for health, efficiency, and general well-being of workers.”^[2] To that end, the FLSA contains an expansive definition of “employee,” “employer,” and “employ” demonstrating Congress’ intent that the FLSA broadly cover workers who depend on their employer for work.^[3] Congress defined “employee” in the FLSA to be “given ‘the broadest definition that has ever been included in any one act.’”^[4] The Supreme Court has further recognized that “the definition of ‘employ’ is broad”^[5] and commented on its “striking breadth.”^[6]

The question of who is an employee is at the core of the FLSA because it is central to determining whether the statute applies. Drawing the line between employees and independent contractors is necessary to and clearly contemplated by the FLSA. The proposal clarifies who is an employee under the Act and who is an independent contractor—a worker who is in business for themselves. By restoring and codifying the longstanding economic realities test, this rule will protect workers against misclassification and even the playing field for businesses that properly classify their workers. DOL has long made this determination both in its own enforcement actions^[7] and in its subregulatory guidance.^[8] Returning to the historical formulation of the economic realities test, which is supported by Supreme Court and the appellate courts’ interpretations of the FLSA, and replacing the 2021 IC Rule would clarify the standard for workers and employers and ensure that workers are not misclassified.

Accordingly, we strongly support the DOL’s proposed rule and urge the Department to finalize it.

Sincerely,

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