Attorneys & Professionals

Earlier this month, a Texas federal court held that the Department of Labor (DOL) violated the Administrative Procedure Act by delaying and withdrawing a Trump-era rule that allowed businesses to more easily classify workers as independent contractors. Siding with companies like Uber and Lyft, the court invalidated the DOL’s withdrawal and reinstated the Trump rule.

The Trump administration issued its independent contractor rule in January 2021, and the rule was set to take effect in March 2021. The DOL, however, froze the Trump rule and then postponed its effective date with a rule of its own. Ultimately, the DOL issued a final rule that withdrew the Trump rule entirely.

The Trump rule significantly changed the test that courts use when determining whether a worker is an employee or an independent contractor under the Fair Labor Standards Act. Before the rule, whether an individual was considered an employee or an independent contractor was determined by courts and the DOL by weighing six factors:

1. The employer’s versus the individual’s degree of control over the work;
2. The individual’s opportunity for profit or loss;
3. The individual’s investment in facilities and equipment;
4. The permanency of the relationship between the parties;
5. The skill or expertise required by the individual; and
6. Whether the work is part of an integrated unit of production.

Asserting that courts and the DOL had inconsistently used these factors, the Trump rule condensed...

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