Resolutions would overturn DOL’s worker classification rule

A pair of lawmakers have initiated efforts in the House and Senate to overturn the U.S. Department of Labor’s new worker classification rule.

Rep. Kevin Kiley, R-Calif., and Sen. Bill Cassidy, R-La., introduced Congressional Review Act resolutions aimed at stopping a final rule that “jeopardizes the ability of 27 million Americans to work as independent contractors.”

“The Biden administration’s priority should not be to do whatever makes it easier to forcibly and coercively unionize workers,” Cassidy said in a news release. “It should be to increase individual freedom and opportunity. This new Biden rule does the opposite, jeopardizing 27 million workers’ ability to make their own hours and make a living without being pressured into joining a union.”

In January, the DOL unveiled a 339-page final rule with the stated purpose of preventing companies from misclassifying workers as independent contractors. The action, which is set to take effect on March 11, rescinds a former President Donald Trump-era rule that focused on control and profit and replaces it with a “totality of circumstances” test.

“The Department believes that this final rule will reduce the risk that employees are misclassified as independent contractors, while at the same time providing greater consistency for businesses that engage with individuals who are in business for themselves,” the DOL wrote.

Is this a move toward AB5?

Worker classification has been a hot-button issue in recent years. Most notably, California passed Assembly Bill 5, which codified the ABC Test and made it difficult for workers to be considered independent contractors.

AB5 prompted a great deal of criticism and sparked a lawsuit from the California Trucking Association and the Owner-Operator Independent Drivers Association.

OOIDA opposes AB5’s “overly broad and unnecessarily restrictive” approach to worker classification.

Opponents of the DOL’s new worker classification rule have expressed concern that it is a move toward AB5. Julie Su, the DOL’s current leader, was California’s labor commissioner when AB5 was enacted.

“Gavin Newsom (California’s governor) and Julie Su’s AB5 severely restricted independent contracting in California, destroying thousands of livelihoods and harming California’s economy,” Kiley said. “As acting secretary of labor, Su and the Biden administration have announced a new Department of Labor rule, modeled after the same job-killing AB5 that will cost millions of independent professionals across the country their livelihoods while restricting the freedom of many millions more to have flexible work arrangements.”

However, the DOL refutes claims that its worker classification rule is modeled after AB5 or the ABC Test.

“The final rule does not adopt an ABC Test, which permits an independent contractor relationship only if all three factors in a three-factor test are satisfied,” the DOL wrote. “Under the final rule, the Department will instead rely on the longstanding multifactor economic reality test used by courts to determine whether a worker is an employee or independent contractor. This test relies on the totality of the circumstances where no one factor is determinative.”

Instead, the DOL has said the final rule will look at six factors:

• Opportunity for profit or loss depending on managerial skill
• Investments by the worker and the potential employer
• Degree of permanence of the work relationship
• Nature and degree of control
• Extent to which the work performed is an integral part of the employer’s business
• Skill and initiative

DRIVE Act

OOIDA recently told members of Congress that it needed to support the DRIVE Act – a bill that would prevent a speed limiter rule from taking effect – before passing the worker classification resolution.

“As the House of Representatives considers a Congressional Review Act Resolution of Disapproval to overturn the Biden administration’s worker classification rule, we are writing to express our concerns about a provision in the Trump administration’s worker classification rule that would be imposed on owner-operators,” OOIDA wrote in a letter signed by President Todd Spencer. “While we generally supported the 2021 Trump rule and believe it should allow for owner-operators to continue working as independent contractors, we strenuously objected to a provision slipped into the final rule that effectively enables large carriers to mandate that the independent truckers they contract with use dangerous speed limiters. This level of micromanagement flies in the face of independence.”

Although a mandate is strongly opposed by truck drivers, FMCSA is projected to unveil a proposal in May to require speed limiters on most commercial motor vehicles. LL