New Independent Contractor Rules
Please note Labor Department Proposes Changes to Independent Contractor Rules
The Labor Department said it would revisit rules that designate whether workers are classified as employees or independent contractors, a move that could affect millions of gig and contract workers in healthcare, restaurants, ride-share transportation, and many other industries.
The department released a rule proposal on Tuesday that would change how labor laws define independent contractors. The new rule, if approved, would rely on a “multifactor economic reality test” to determine whether a worker is truly in business by themselves and controls aspects of their employment like whether they perform managerial duties, how they are supervised and whether they are able to set prices.
Biden administration officials said that workers will still be able to work as much or as little as they want under their proposed rule. Trump administration officials had said their rule made it easier for Americans to be self-employed and set their own hours, and some corporate opponents of a more stringent standard have argued that it is unrealistic to extend employee-like benefits to workers who were on the clock for just a few hours a week.
Can You?
Biden says “You can work as many hours as you want”.
Can you? This reminds me of Obama’s promise “You can keep your doctor.”
Will it make sense for Uber to keep as employees people who only want to work a few extra hours a week?
Even if so, at what cost to the consumer?
Vague Nonsense
The Department of Labor Proposed Rule does not explicitly define “independent contractor”. Instead it uses language that can mean whatever the administration wants.
The document is 184 pages long, not a light read.
The FLSA does not define the term “independent contractor.” While it is clear that section 3(g)’s “suffer or permit” language contemplates a broader coverage of workers compared to what exists under the common law, “there is in the [FLSA] no definition that solves problems as to the limits of the employer-employee relationship under the Act.”23 Therefore, in articulating the distinction between FLSA-covered employees and independent contractors, courts rely on a broad, multifactor “economic reality” analysis derived from judicial precedent.
The Administration proposes scrapping “core factors” and instead returning to a “totality-of-the-circumstances” which will of course mean whatever the administration wants.
The proposed change also considers whether the work is integral to the employer’s business rather than whether it is exclusively part of an “integrated unit of production.”
The Biden Administration considers driving an integral part of the Uber, Lyft, and Door Dash model so automatically they become employees whether or not the employees can set set their own hours and work at will.
The change does not stop there. The Administration also proposes language regarding whether an “individual has an opportunity to earn profits or incur losses based on his or her exercise of initiative (such as managerial skill or business acumen or judgment) or management of his or her investment in or capital expenditure on, for example, helpers or equipment or material to further his or her work.”
The proposal specifically excludes one’s car as a capital investment.
Also consider this sentence: “Finally, the provision provides that “[t]his factor weighs towards the individual being an employee to the extent the individual is unable to affect his or her earnings or is only able to do so by working more hours or faster.”
This broad language seemingly applies to everybody including contract programmers. I stopped reading at page 78 of 184, confident that the changes are meant to apply to nearly every business imaginable.
Want to Work for Yourself?
Perhaps you will not be able to.
California has gone after independent truckers and no doubt these changes are an attempt to impose California rules on everyone.
The next step will be to unionize everybody. Add this to Biden’s push for more inflation.
Inflationary Proposals
- Al Gore and John Kerry Aim to Hijack the World Bank for Climate Agenda
- An Inflationary Quagmire of US and EU Climate Change Hypocrisy
- Why Are Energy Prices High? Blame President Biden
- On March 12, 2022, Nancy Pelosi said “Government Spending Reduces Debt”.
- Biden’s $20,000 Student Debt Forgiveness Order Will Trigger More Inflation Next Year
Add new independent contractor rules to the list of Biden’s mandates and legislation that will increase inflation.
De-globalization and decarbonization are also very inflationary.
The Fed has its work cut out for them.
This post originated at MishTalk.Com
Please Subscribe!
Like these reports? I hope so, and if you do, please Subscribe to MishTalk Email Alerts.
Subscribers get an email alert of each post as they happen. Read the ones you like and you can unsubscribe at any time.
If you have subscribed and do not get email alerts, please check your spam folder.
Mish
My impression is that this does not meet Milton Friedman’s definition of inflation. It is strongly redistributive, and is intended to be strongly redistributive, benefiting the lower working classes at the expense of the bourgeois (=middle class and up). Philosophical-economic question = “Is that a good thing?”
If / when they can also enroll all the ‘uber drivers’ into a union, then “the powers that be” will be happy. The labor chiefs get some unearned income, and the politicians (Democrats) get “campaign donation” payback.
Always remember that Biden is the guy who promised the oligarchs that nothing will fundamentally change. And that is what it will be.
Do not have the time to read the 184 pages this afternoon. Are real estate agents considered employees now?
I read this here a few years ago…
USC § 3401(c) Employee – For purposes of this chapter, the term “employee” includes an officer, employee, or elected official of
the United States, a State, or any political subdivision thereof, or the
District of Columbia, or any agency or instrumentality of any one or more of
the foregoing. The term
“employee” also includes an officer of a corporation.
26
USC § 7701) (26) Trade or business – The term ”trade or business” includes
the performance of the functions of a public office.
26
USC §7701(c):(c) Includes and including – The terms “includes” and “including”
when used in a definition contained in this title shall not be deemed to
exclude other things otherwise within the meaning of the term defined.
Under
this rule, the term “includes” provides for what courts have described as a
“calculated indefiniteness”. This is the expand-ability of the meaning of a
statutory term to things not listed in the definition (indefiniteness), but to only
things of the same character as those listed(calculated).
IE,
if you’re flipping burgers, your job doesn’t have the same character as an
officer, employee, or elected official of the United States, a State, or any
political subdivision thereof, or the District of Columbia, or any agency or
instrumentality of any one or more of the foregoing, therefore you are not an
employee by definition even though a W-2 is an affidavit stating you are. A W-2 should not be issued for flipping burgers.
Also,
if you own a facility not dealing in government contracts (Joe’s Burgers), or
if you offer a service (dentist) you don’t owe taxes since the character of
your job is not the functions of a public office.
The IRS instructions for a 1099 MISC states, ‘personal
payments are not reportable.’