Refile: Labor Dept rule on independent contractors likely to land as early as Tuesday - sources

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11/10/2022 01:35

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    By Nandita Bose
       WASHINGTON, Oct 10 (Reuters) - A proposed Department of
Labor rule defining whether workers for rideshare, retail and
delivery companies are misidentified as independent contractors
is expected to be released as early as Tuesday, two sources with
knowledge of the matter said.
    Details of the new rule have not been made public. But the
department is expected to model it on legal guidance that says
people economically dependent on a company are employees, or go
further to expand the pool of workers who should receive
benefits, legal experts have said. 
    The Labor Department has scheduled a news conference at 9:30
am ET on Tuesday with Solicitor of Labor Seema Nanda and
Principal Deputy Wage and Hour Administrator Jessica Looman but
has not offered any details on what they will discuss.
    The Labor Department and the White House declined to
comment.
    The White House's Office of Information and Regulatory
Affairs (OIRA) completed a review of the rule on Sept. 29,
according to White House records.
    Tim Taylor, a litigation attorney and partner at Holland &
Knight, who had served as deputy solicitor at the Labor
Department, said rules typically are cleared in three weeks to a
month, but the independent contractor rule was with White
House's OIRA for about three months.
    He said the lengthy review period at the White House
suggests that the rule proposed by the Labor Department is
either long and complex or that the White House wanted something
different than what the department proposed.
    "And typically when that happens it is because the White
House wants something more aggressive," he said. 
    Reuters recently reported that groups representing employers
had been trying, and failing, to convince a labor-friendly White
House that any broad rule would hurt workers who want to remain
independent and have flexibility.
    More than one-third of U.S. workers, or nearly 60 million
people, performed some sort of freelance work in the past 12
months, a December 2021 survey by freelancing marketplace Upwork
showed.
    Broadly defining independent contractors as employees would
force companies to pay benefits, such as overtime pay and
health, that hurt their bottom line. Employers can save about
30% by skipping payroll taxes and unemployment and benefit
costs, workers' groups estimate.
    During separate meetings with the White House to discuss the
rule, several worker groups argued a growing number of
companies, including in health care, are misclassifying hundreds
of thousands of workers. These workers are often left without
social safety nets, accident coverage or paid sick leave, and
are squeezed by high gas prices, they said.
    This is President Joe Biden's second stab at resetting rules
about how employees can be defined. A federal judge in Texas
ruled in March that the Biden administration, which had
withdrawn a Trump-era rule that favored business groups on the
issue, had not followed proper procedure.
     The proposed rule will be open to public comment before the
Labor Department issues a final rule, which companies are
expected to quickly challenge in court. 
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EXPLAINER-How the Biden administration could restrict
independent contracting      urn:newsml:reuters.com:*:nL1N30Q1OX
Rideshare, retailers brace for tough U.S. independent contractor
rule - Reuters News     urn:newsml:reuters.com:*:nL4N30L3CT
https://www.reuters.com/world/us/bidens-labor-department-rescinds-trump-era-rule-affecting-gig-workers-2021-05-05/
    https://www.reuters.com/world/us/bidens-labor-department-rescinds-trump-era-rule-affecting-gig-workers-2021-05-05/
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 (Reporting by Nandita Bose in Washington, Additional reporting
by Dan Weissner and David Shepardson, Editing by Heather
Timmons, Colleen Jenkins and Gerry Doyle)
 ((nandita.bose@thomsonreuters.com; +12023545868; Reuters
Messaging: nandita.bose.reuters.com@reuters.net))