US Department of Labor (US DOL) Proposes New Regulations on Independent Contractor and Joint Employer Tests

The US DOL proposed new rules early this spring on independent contractor and joint employer classification that largely resemble standards used in the first Trump presidential administration.  The public comment period has expired on both, and the US DOL is evaluating comments before issuing final rules.  The current US DOL test for independent contractor status uses six equally-weighted factors (degree of worker control, investment, profit/loss opportunity, job length, skill level, and integrality to customer business) while the new test ranks degree of control and opportunity for profit or loss highest with skill, job length and integrality being less significant.  The new rules also declined to adopt a stricter ABC test used by some states like California that favor employee classification.  Similarly, the proposed rules on determination of joint employer status in vertical (supplier-customer) and horizontal (separate businesses using same worker in concert) relationships are considered more business-friendly because the focus is on substantial, direct and immediate control over the worker rather than unexercised reserved control in a contract or other types of indirect control from prior guidance.  Final US DOL rules in these areas would not impact state laws using stricter worker-friendly tests because federal law in this area constitutes a floor rather than a ceiling.