On January 7, we wrote about the DOL’s Final Rule on Independent Contractor Status that was slated to take effect on March 8, 2021. Many employer and business groups applauded the Final Rule because its focus on the economic reality test was intended to make it easier for employers to classify certain workers as independent contractors. The Final Rule was expected to have a particularly positive impact on the “gig” economy, which has classified many workers as independent contractors. In our January post, we noted that we did not know if the Final Rule would survive under the Biden administration. It now appears that it will not.
On January 20, the Biden administration froze all pending regulations, including the Independent Contractor Final Rule. The DOL received comments from multiple groups, including the U.S. Chamber of Commerce, opposing a delay of the effective date of the Final Rule. Despite this support, on March 2 the DOL announced that it was delaying the Final Rule’s effective date until May 7.
This delay is likely the death knell for the Final Rule. It also may signal a less employer-friendly DOL for the near future.