Naples, FL — The Department of Labor recently announced a finalized rule that would clarify how to determine between an independent contractor and an employee under the Fair Labor Standards Act, or the FLSA. The Foundation for Government Accountability (FGA) offered the following statement in support of this long-overdue decision.
Prior to the rule, there had not been a clear definition of ‘independent contractor’ in the more than 80 years since the FLSA was signed into law. One of the key areas where the new rule offers clarity is in the “economic reality” test, because there is a clear difference between a worker who is dependent on their boss’s business and a worker who is in business for themselves. Treating them as the same, as we saw in California’s sweeping legislative action regarding the ‘gig’ economy, removes flexibility from millions of workers.
“The Department of Labor has taken another important step in removing regulatory barriers to work by clarifying the test to determine who is an independent contractor,” said Haley Holik, senior fellow at FGA. “The majority of independent contractors prefer their work arrangement because it means flexibility, and this rule simplifies regulatory compliance. Rigid laws mean less economic opportunity, and the streamlined test will allow more Americans to find flexible work, make a living, and support themselves and their families.”
The Foundation for Government Accountability is a non-profit, multi-state think tank that specializes in health care, welfare, and work reform. To learn more, visit TheFGA.org