Health Care and Trucking Industries Likely to Feel Repercussions from Independent Contractor Rule, SHRM
Health Care and Trucking Industries Likely to Feel Repercussions from Independent Contractor Rule, SHRM
The U.S. Department of Labor’s (DOL) new rule for determining whether a worker is an employee or an independent contractor goes into effect on March 11. The Society for Human Resource Management (SHRM) talked with Linda Bond Edwards about the new standard for the article published on January 24, 2024.
SHRM reported that the new rule restores an earlier standard that required companies to weigh a variety of economic factors together to determine whether a worker is an independent contractor or employee. This replaces the 2021 rule that the DOL rescinded in which two factors—control over the work and opportunity for profit or loss—carried greater weight. Now employers must use a totality-of-the-circumstances analysis, which incorporates the amount of skill and initiative required for the work, the degree of permanence of the working relationship, the worker’s investment in equipment or materials for work, and the extent to which the service rendered is an integral part of the employer’s business.
“There is no single factor that’s weighted heavier than all of the other factors,” said Linda Bond Edwards, an attorney with RumbergerKirk in Tallahassee, Fla. “Looking at the totality of the circumstances is always challenging for employers. [The new rule] may favor employees [claiming they were misclassified as independent contractors] to some degree because it increases the ability for the facts to force their case to a jury and not to a judge.”
Experts suggest the new standard may disrupt health care and trucking industries’ labor supply and escalate labor costs due to their heavy reliance on independent contractors.
