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Democratic AGs Fight Trump Administration’s Proposed Employee/Contractor Classification Rule

  • A group of 24 democratic AGs, led by Massachusetts AG Maura Healey, New York AG Letitia James, and Pennsylvania AG Josh Shapiro, sent a comment letter to Labor Secretary Eugene Scalia calling on the Department of Labor (“DOL”) to rescind a proposed rule titled Independent Contractor Status Under the Fair Labor Standards Act (the “Rule”) that would make it easier for employers to classify workers as independent contractors rather than as employees.
  • The Rule would establish a five-factor test, including the nature and degree of the worker’s control over the work and the worker’s opportunity for profit or loss, to determine whether a person is an “employee”—and therefore protected by the FLSA—or an “independent contractor” not subject to such protections.
  • In the letter, the AGs argue that the proposed rule could harm workers by lowering wages and stripping benefits such as employer-sponsored health coverage for millions of workers, exposing reclassified or misclassified workers to tax liability, and removing federal minimum wage and overtime pay requirements for workers reclassified or misclassified as independent contractors. The letter further argues that DOL did not provide a satisfactory explanation for its proposed rule or attempt to quantify the real-world consequences of its implementation.