‘Plain and simple, this rule constitutes a war on the independent contractor model’
By 
Joe Biden holds a coaster with the presidential seal while he talks on the phone with Canadian Prime Minister Justin Trudeau, Thursday, Oct. 5, 2023, in the Oval Office. (Official White House photo by Cameron Smith)
By Will Kessler
Daily Caller News Foundation
The Biden administration’s new labor rule will likely increase costs for employers and restrict Americans’ freedom to choose when and where they work, experts told the Daily Caller News Foundation.
Through the new rule, which goes into effect on March 11, the Department of Labor is reclassifying many workers who were previously classified as independent contractors to company employees under the Fair Labor Standards Act (FLSA) of 1938, thereby entitling them to benefits like overtime pay and a minimum wage, according to the DOL. The rule will severely hamper the flexibility afforded by many freelancing positions and could push many current employees out of work entirely as regulators crack down on the gig economy, according to experts who spoke to the DCNF.
“The consequence is that it gives regulators new powers to micromanage businesses that rely on contract labor and the workers who choose to be ‘independent contractors’ — the latter just being a fancy term for ‘freelancer.’” Sean Higgins, a labor policy expert at the Competitive Enterprise Institute, told the DCNF. “It gives the regulators the power to say that freelancers are not in fact freelancers and can only be hired as regular employees. In which case, many simply will not get work at all because many employers — so-called ‘gig economy’ ones in particular — use a business model that doesn’t involve having large numbers of regular employees.”
The FLSA seeks to ensure that labor conditions are not “detrimental to the maintenance of the minimum standard of living necessary for health, efficiency, and general well-being of workers,” according to the DOL. Under federal law, employees are required to be paid minimum wage for all hours worked and one and a half times pay for time worked over 40 hours in a week, while independent contractors are not.
Under the new rule, workers will now be examined to determine whether they are “economically dependent” on their employer to decide whether they are employees or not, meaning workers who rely on their job with their employer but utilize the flexibility of freelancing would be forcibly ushered in as employees if not terminated, according to the DOL. The new guidelines depart from criteria established in January 2021 under the Trump administration that looked at five key factors to determine employment status, with the level of control over the work and the worker’s opportunity for profit or loss being the two most important.