Trump administration finalizes rule that could define construction workers as contractors

The US Department of Labor has finalized a decision that could make it easier to classify workers as independent contractors, rather than employees eligible for legal benefits, for “small economy” companies. The Trump administration released its final version of the rule today, and it is expected to go into effect on March 8, although that could change after President-elect Joe Biden takes office in January.

The DOL proposed a new framework last year for classifying employees and contractors. It focuses on two “key factors” to distinguish the two: “the nature and degree of control over the work” and “the desirability of profit or loss” based on initiative and investment. It also lists additional “benchmarks” which include “the amount of skills required” for the job, the “degree of permanence” of the employment relationship and whether the work is part of an “integrated production unit”.

As The New York Times noted last year, the rule interprets existing regulations rather than establishing new ones, and only covers federal laws enforced by the DOL. States can always set their own definitions – like California’s Prop 22, which specifies that Lyft and Uber drivers are not employees. However, it could still largely influence how companies define their workers. The National Employment Law Project, a nonprofit labor rights group, called it a “narrowing” of standards rather than a meaningful clarification.