[Federal Register Volume 86, Number 23 (Friday, February 5, 2021)]
[Proposed Rules]
[Pages 8326-8327]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-02484]
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DEPARTMENT OF LABOR
Wage and Hour Division
29 CFR Parts 780, 788, and 795
RIN 1235-AA34
Independent Contractor Status Under the Fair Labor Standards Act:
Delay of Effective Date
AGENCY: Wage and Hour Division, Department of Labor.
ACTION: Proposed delay of effective date.
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SUMMARY: In accordance with the Presidential directive as expressed in
the memorandum of January 20, 2021 from the Assistant to the President
and Chief of Staff, entitled ``Regulatory Freeze Pending Review,'' this
action proposes to delay until May 7, 2021, the effective date of the
rule entitled Independent Contractor Status Under the Fair Labor
Standards Act (``Independent Contractor Rule''), published in the
Federal Register on January 7, 2021. The rule's current effective date
is March 8, 2021. The Wage and Hour Division seeks comments on this
proposed delay, which would allow it additional opportunity for review
and consideration of the new rule.
DATES: Submit written comments on or before February 24, 2021.
ADDRESSES: You may submit comments, identified by Regulatory
Information Number (RIN) 1235-AA34, by either of the following methods:
Electronic
[[Page 8327]]
Comments: Submit comments through the Federal eRulemaking Portal at
http://www.regulations.gov. Follow the instructions for submitting
comments. Mail: Address written submissions to Division of Regulations,
Legislation, and Interpretation, Wage and Hour Division, U.S.
Department of Labor, Room S-3502, 200 Constitution Avenue NW,
Washington, DC 20210. Instructions: Please submit only one copy of your
comments by only one method. Commenters submitting file attachments on
www.regulations.gov are advised that uploading text-recognized
documents--i.e., documents in a native file format or documents which
have undergone optical character recognition (OCR)--enable staff at the
Department to more easily search and retrieve specific content included
in your comment for consideration. Anyone who submits a comment
(including duplicate comments) should understand and expect that the
comment will become a matter of public record and will be posted
without change to https://www.regulations.gov, including any personal
information provided. All comments must be received by 11:59 p.m. on
February 24, 2021, for consideration in this proposed delay of
effective date. The Department strongly recommends that commenters
submit their comments electronically via http://www.regulations.gov to
ensure timely receipt prior to the close of the comment period, as the
Department continues to experience delays in the receipt of mail.
Submit only one copy of your comments by only one method. Docket: For
access to the docket to read background documents or comments, go to
the Federal eRulemaking Portal at http://www.regulations.gov.
FOR FURTHER INFORMATION CONTACT: Amy DeBisschop, Division of
Regulations, Legislation, and Interpretation, Wage and Hour Division,
U.S. Department of Labor, Room S-3502, 200 Constitution Avenue NW,
Washington, DC 20210; telephone: (202) 693-0406 (this is not a toll-
free number). Copies of this proposal may be obtained in alternative
formats (Large Print, Braille, Audio Tape or Disc), upon request, by
calling (202) 693-0675 (this is not a toll-free number). TTY/TDD
callers may dial toll-free 1-877-889-5627 to obtain information or
request materials in alternative formats.
SUPPLEMENTARY INFORMATION: On January 7, 2021, the Department of
Labor's Wage and Hour Division (``WHD'') published the Independent
Contractor Rule in the Federal Register with an effective date of March
8, 2021. See 86 FR 1168. The Independent Contractor Rule would, among
other actions, introduce into title 29 of the Code of Federal
Regulations a new part (part 795) entitled ``Employee or Independent
Contractor Classification under the Fair Labor Standards Act.'' See id.
In a memorandum dated January 20, 2021 and entitled ``Regulatory
Freeze Pending Review,'' published in the Federal Register on January
28, 2021 (86 FR 7424) (``Regulatory Freeze Memorandum''), the Assistant
to the President and Chief of Staff, on behalf of the President,
directed the heads of Executive Departments and Agencies to review and
consider delaying the effective dates of all regulations that had been
published in the Federal Register but had not yet taken effect until 60
days following the date of the memorandum or beyond. The Independent
Contractor Rule falls within this category. The Regulatory Freeze
Memorandum states that the purpose of such delays is for agencies to
review any questions of fact, law, and policy that the rules may raise.
The memorandum notes certain exceptions that do not apply here. On
January 20, 2021, the Office of Management and Budget (OMB) also
published OMB Memorandum M-21-14, Implementation of Memorandum
Concerning Regulatory Freeze Pending Review, which provides guidance
regarding the Regulatory Freeze Memorandum. See M-21-14, Implementation
of Memorandum Concerning Regulatory Freeze Pending Review, https://www.whitehouse.gov/wp-content/uploads/2021/01/M-21-14-Regulatory-Review.pdf (last visited Jan. 26, 2021). OMB Memorandum M-21-14
explains that pursuant to the Regulatory Freeze Memorandum, agencies
``should consider postponing the effective dates for 60 days and
reopening the rulemaking process'' for ``rules that have not yet taken
effect and about which questions involving law, fact, or policy have
been raised.'' Id. In accordance with the Regulatory Freeze Memorandum
and OMB Memorandum M-21-14, WHD proposes to delay the effective date of
the Independent Contractor Rule to May 7, 2021, which would be 60 days
beyond its original effective date.
The delay of the Independent Contractor Rule's effective date would
give WHD additional opportunity to review and consider the rule as the
Regulatory Freeze Memorandum and OMB Memorandum M-21-14 contemplate.
The rule, which would be WHD's first generally applicable regulation
addressing the question of who is an independent contractor and, thus,
not an employee under the FLSA, would adopt a new legal standard for
determining employee and independent contractor status under the FLSA.
In light of the significance of this change, WHD is proposing to allow
itself more time to further review and consider, among other important
issues, the legal, policy, and/or enforcement implications of adopting
that standard, such as: Whether the rule effectuates the FLSA's
purpose, recognized repeatedly by the Supreme Court, to broadly cover
workers as employees; \1\ the costs and benefits attributed to the
rule, including the assertion that workers as whole will benefit from
the rule; \2\ and/or whether the rule's explanation of the standard
provides clarity for stakeholders and for the purposes of WHD
enforcement, as was intended.
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\1\ See, e.g., Rutherford Food Corp. v. McComb, 331 U.S. 722,
728 (1947) (``The [FLSA] definition of `employ' is broad.''); United
States v. Rosenwasser, 323 U.S. 360, 362-63 (1945) (``A broader or
more comprehensive coverage of employees [than that of the FLSA] . .
. would be difficult to frame.'').
\2\ See 86 FR 1209, 1223.
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In addition, WHD believes that the proposed delay is reasonable and
would not be disruptive. The Independent Contractor Rule is not yet
effective, and WHD has not implemented the rule. For example, WHD's
public guidance, including its longstanding Fact Sheet #13, entitled
``Employment Relationship under the Fair Labor Standards Act (FLSA),''
does not contain the rule's standard for determining whether a worker
is an employee or independent contractor and will continue to be
available to all. Moreover, Federal courts across the country have
developed and applied legal analyses for determining employee and
independent contractor status under the FLSA. In sum, employers and
workers are already familiar with the standard that WHD and courts will
apply when determining a worker's status under the FLSA during any
delay of the rule's effective date.
WHD seeks comment on its proposal to delay the Independent
Contractor Rule's effective date to May 7, 2021 in order to further
review and consider the rule. WHD will consider only comments about its
proposal to delay the rule's effective date.
Milton A. Stewart,
Acting Secretary of Labor.
[FR Doc. 2021-02484 Filed 2-3-21; 11:15 am]
BILLING CODE 4510-27-P