Status
The ABC-opposed and House-passed PRO Act (H.R.20/S.567) includes a provision making it significantly more difficult for a worker to operate as an independent contractor. The bill does this by imposing the “ABC test,” used to determine if a worker is an employee or independent contractor, into the National Labor Relations Act, applying it nationwide.
In January 2021, the DOL under President Trump issued an independent contractor final rule under the Fair Labor Standards Act, which ABC strongly supported. Soon after, the DOL under President Biden issued a proposed rule to withdraw the final rule and ABC submitted comments opposing it. On March 26, ABC, the ABC Southeast Texas chapter and the Coalition for Workforce Innovation filed suit against DOL. In May, DOL rescinded the final rule.
On March 15, the U.S. District Court for the Eastern District of Texas dealt a blow to the Biden administration’s efforts to delay and rescind the Trump administration’s 2021 independent contractor final rule in that case. Under a decision applauded by ABC, the ABC-supported rule went into effect as scheduled on March 8, 2021, and remains in effect today.
On June 3, the DOL stated that it planned to engage in rulemaking on determining employee or independent-contractor status under the FLSA.
On July 29, ABC met with OMB and DOL staff to discuss its concerns with the new forthcoming proposed rule. ABC explained that independent contractors are an essential lifeline for the construction industry. They provide specialized skills, entrepreneurial opportunities and stability during fluctuations of work common to construction. Any effort by the DOL to undermine that status in this rulemaking will likely be legally challenged by ABC.
On Oct. 11, the DOL announced a new proposed rule to rescind and replace the ABC-supported 2021 final rule on independent contractors.
On Oct. 19, ABC urged the DOL to extend the Nov. 28 comment period deadline by 60 days, stating, “ABC represents a large number of contractors and subcontractors who will be significantly impacted by this new proposed rule. Due to the complexity of the issues included in the 58-page proposal, the current 45-day comment period does not allow sufficient time for ABC to fully analyze the rulemaking as well as effectively communicate the broad scope of issues with its members before providing comments.”
On Oct. 25, the DOL announced an extension of the comment deadline on the proposed rule from Nov. 28 to Dec. 13.
On Nov. 9, ABC participated in the U.S. Small Business Administration’s Office of Advocacy virtual roundtable on the proposed rule.
The National Labor Relations Board under President Biden is also trying to change the employee classification standard under the NLRA. In December 2021, the NLRB invited amicus briefs in The Atlanta Opera case asking if the NLRB should revert back to the Obama-era standard, which severely undervalued the significance of a worker’s entrepreneurial opportunity for economic gain when considering classification. ABC joined the CDW in filing an amicus brief, which highlighted NLRB’s two failed attempts to rewrite the standard for determining independent contractor status under the NLRA.
On Dec. 13, ABC submitted comments opposing the DOL’s proposed rule.
Desired Outcome
Independent contractors are an essential lifeline to the construction industry, and any effort by the DOL to undermine that status will likely be challenged by the coalition of which ABC is a part.