Supporters and opponents debated the pros and cons to changing the rule that determines how to properly classify employees and independent contractors during a U.S. House Education and the Workforce Committee hearing on April 19.
"The independent workforce is growing, and it's here to stay," said Tammy McCutchen, a senior affiliate at Resolution Economics, a Los Angeles-based provider of litigation consulting and expert witness services.
Congress is considering the PRO Act, legislation that would make it more difficult for employers to classify their workers as independent contractors, who are not covered by the National Labor Relations Act (NLRA).
In October 2022, the U.S. Department of Labor (DOL) issued a proposed rule to clarify who is an independent contractor under the federal Fair Labor Standards Act, potentially affecting the gig economy.
The DOL is proposing to rescind a 2021 rule in which two core factors—control over the work and opportunity for profit or loss—carried greater weight in determining the status of independent contractors. Under the new proposed rule, employers would use a totality-of-the-circumstances analysis, in which all the factors do not have a predetermined weight.
Supporters of Tightening the Classification Rule
Supporters at the hearing argued that the classification rule should change to protect more workers and make a more level playing field for all employers. Independent contractors are not entitled to overtime pay, minimum wage...
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