“Delaying the effective date of the independent-contractor rule will force companies to decide between exposure to FLSA liability and loss of precious resources.”
—John Masslon, WLF Senior Litigation Counsel

Click here for WLF’s comment.

WASHINGTON, DC— Washington Legal Foundation (WLF) today urged a federal labor regulator to stay the course and permit an independent-contractor rule to go into effect on March 8, 2021. In formal comments filed with the Department of Labor’s Wage and Hour Division, WLF explains that delaying the effective date would cause economic uncertainty. This economic uncertainty will hurt vulnerable businesses in an already uncertain economic climate.

In September, the Department of Labor proposed a rule clarifying how to decide if a worker is an employee or an independent contractor. Earlier this year, the agency finalized the rule with an effective date of March 8, 2021. The final rule tracks the FLSA’s text and provides regulatory certainty for companies that may hire an independent contractor. Less than three weeks ago, however, the Department of Labor proposed delaying the final rule’s effective date so that the new administration could review it.

The Department of Labor issued the rule to promote regulatory certainty. But as explained in WLF’s comment, delaying the rule’s effective date would cause regulatory uncertainty. Many experts—from the former chairman of the Federal Reserve to the current head of the International Monetary Fund—believe that regulatory uncertainty hurts the economy. In these trying times, regulatory uncertainty could be what pushes companies out of business. WLF urges the Department of Labor not to go down this path. Rather, it should stay the course and allow the rule to take effect on March 8.