Presidential Transition Updates

The Trump Administration issued a final rule on January 6 that makes it easier for businesses to classify workers as independent contractors.

The U.S. Labor Department’s rule establishes a less restrictive standard for when employers may classify workers as independent contractors rather than as employees. This new regulation has the support of many business organizations but is opposed by workers’ groups seeking policies that would reclassify more independent contractors as employees. Employees are covered by federal minimum wage and overtime laws.

The rule provides five factors to determine whether a worker is economically dependent on an employer. If economically dependent, then the worker would be considered an employee, not an independent contractor.

But the rule could face roadblocks in the Biden Administration.  As a regulation issued in the final weeks of the Trump Administration (a “midnight” rule), it likely will be temporarily stopped from taking effect via a presidential memorandum released on Inauguration Day. The rule is to take effect in early March, but the memo would freeze its implementation, at least for a while.

In the meantime, the Labor Department would likely weigh its options – whether to allow the rule to take effect or essentially do a “redo” of the rulemaking. A new rulemaking would solicit public comments on whether to revise the independent contractor policies.   

NAMM continues to monitor, and post NAMM-member relevant updates related to the U.S. Presidential transition, and incoming 117th Congress. Readers should be aware that given the fluidity of the issue, the federal government may alter its plans at any time. The information presented on this website is accurate as of the date of the posting. NAMM will continue to monitor this issue and will provide updates as they are available. Please visit this page regularly.

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