WLF Lauds New Independent Contractor Rules Grounded in “Economic Reality”

“The Department’s clear guidance is consistent with caselaw, keeps faith with the statute, and reflects economic reality.”
—Zac Morgan, WLF Senior Litigation Counsel

Click here to read WLF’s comment.

(Washington, DC)—Washington Legal Foundation (WLF) today urged the U.S. Department of Labor (DOL) to adopt proposed regulations clarifying when a worker must be classified as an employee or an independent contractor under federal labor law.

As administrations have flipped, so has DOL’s guidance. In 2021, the first Trump administration issued clarifying rules on this issue—and the subsequent Biden administration reversed those changes and imposed its own. Under Chevron deference, this was tolerable. Courts had to defer to “reasonable” administrative statutory constructions, even if they weren’t the best. But a few months after the Biden rule took effect, the Supreme Court decided Loper Bright v. Raimondo, which overruled Chevron. Now agencies must apply the best reading of a statute, consistent with Supreme Court caselaw and venerable canons of construction.

WLF’s comment contends that the DOL’s new regulations successfully thread that needle, while emphasizing that “economic independence should be the touchstone when assessing whether a worker is an independent contractor.” WLF also praised the Department’s decision for not just getting the law right, but for doing so clearly—reducing ambiguity and “brighten[ing] the lines.”