Comment on rule resulting in overbroad independent contractor classification (Department of Labor)

Public Rights Project filed a comment urging the Department of Labor (DOL) to withdraw a proposed rule that would lead businesses to increasingly misclassify their workers as independent contractors. Misclassification would result in worse pay and the loss of benefits for workers across the country.

The proposed rule changes how businesses classify workers as independent contractors or employees. Misclassification means workers could lose protections under the Fair Labor Standards Act (FLSA), the Family and Medical Leave Act, and the Migrant and Seasonal Agricultural Worker Protection Act. 

Our comment argues that the proposed rule violates federal, state, and local law — conflicting with established labor law and court rulings that protect workers from misclassification. Our comment details the consequences to workers, businesses, and local governments:

• Loss of pay and benefits: Misclassified workers will lose minimum wage and overtime protections. They will be excluded from unemployment benefits, paid/unpaid leave, and workers’ compensation, and will also be responsible for work-related expenses. 
• Increased inequality: Black, immigrant, and other workers of color are already overrepresented in jobs with significant independent contractor misclassification. Increased misclassification will push wages down across industries, exacerbating income and wealth inequality. 
• Strain on local governments: Misclassified workers losing benefits will turn to social services, like food and housing assistance. At the same time, local governments will face shrinking tax revenue from businesses contributing less to the social safety net and workers with lower wages paying less in taxes.
• Disadvantaging law-abiding businesses: Businesses that misclassify workers avoid paying taxes and unemployment insurance contributions paid by other businesses that properly classify workers.

We urge DOL to withdraw the rule to ensure all working people are properly classified by their employers. Moving forward would only harm our communities and the local governments that serve them.

Read the comment.