Republican lawmakers have begun an effort to overturn the US Department of Labor’s final rule covering independent contractor misclassification.
The rule was announced Jan. 9 and uses a multifactor “economic reality” test to determine when a worker is an independent contractor. It is scheduled to take effect March 11 and would rescind an earlier Trump-era independent contractor rule.
A Congressional Review Act resolution to overturn the final rule was introduced March 6 by Sen. Bill Cassidy, R-Louisiana. In addition, Rep. Kevin Kiley, R-California, introduced a companion CRA resolution in the US House of Representatives.
“The Biden administration’s priority should not be to do whatever makes it easier to forcibly and coercively unionize workers. It should be to increase individual freedom and opportunity,” Cassidy said in a press release. “This new Biden rule does the opposite, jeopardizing 27 million workers’ ability to make their own hours and make a living without being pressured into joining a union.”
Kiley said in a press release the final rule is modeled after California’s AB 5 law and would cost millions of independent contractors their livelihoods.
“Our legislation under the Congressional Review Act nullifies this terrible regulation and protects independent contractors,” Kiley said. “Washington should support workers, not regulate them into oblivion.”
In the Senate, 31 other senators joined Cassidy in cosponsoring the Congressional Review Act resolution, including Mitt Romney, R-Utah.
“Utah is home to tens of thousands of self-employed and independent workers who make significant contributions to our growing economy,” Romney said in a press release. “This overreaching worker classification rule jeopardizes the flexibility and autonomy that these hardworking Utahns rely on. The Biden Administration should be supporting the individual freedoms of gig workers and contractors — not adding greater regulatory restrictions and uncertainty.”
The Congressional Review Act is an oversight tool that Congress may use to overturn final rules issued by federal agencies, according to a description by the National Conference of State Legislatures.
“While more than 200 joint resolutions of disapproval for more than 125 rules have been introduced since the CRA’s enactment in 1996, the method has been successfully used to overturn only a handful of rules,” according to the description.
Separately, the US Chamber of Commerce announced March 5 that it is joining a lawsuit by the Coalition for Workforce Innovation that challenges the Department of Labor’s final rule.
“The Department of Labor’s rule would deprive millions of Americans the freedom to choose to work as an independent contractor,” Marc Freedman, VP of the US Chamber of Commerce’s Employment Policy Division, said in a press release.
“Individuals work as independent contractors for all kinds of reasons, including greater work-life balance, the ability to choose when and how to work and the opportunity to be one’s own boss,” Freedman said.
Other co-plaintiffs in the lawsuit include the Associated Builders and Contractors, Associated Builders and Contractors of Southeast Texas, the American Trucking Associations, Financial Services Institute, National Federation of Independent Business and the National Retail Federation.
In announcing the final rule on Jan. 9, the Department of Labor said the rule provides guidance on proper classification and seeks to combat employee misclassification.
A coalition of independent workers and advocacy groups called Save Independent Work has also launched a campaign to overturn the rule. Taking part in the coalition are the California Business and Industrial Alliance, Freelancers Against AB5 and the Commonwealth Foundation.
“Misclassifying employees as independent contractors is a serious issue that deprives workers of basic rights and protections,” Acting Secretary of Labor Julie Su said in a press release issued Jan. 9. “This rule will help protect workers, especially those facing the greatest risk of exploitation, by making sure they are classified properly and that they receive the wages they’ve earned.”