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Employment Law
What’s In Store For 2023? A Review Of Potential Developments In
Employment Law
Robert Lockwood
By Robert Lockwood
In 2023, it seems like all things old will be new again. The Biden administration continues to unwind many of the policies implemented under President Trump. Here’s a list of potential developments in the labor and employment sector for 2023.
1. The Department of Labor will revise its rules on classifying independent contractors.
Many businesses use independent contractors to provide services. Independent contractors are not entitled to overtime under the Fair Labor Standards Act – that right only belongs to “employees.” On its way out the door in January 2021, the Trump DOL released a final rule making it easier for businesses to classify workers as independent contractors. The Trump DOL’s rule focused on two core factors: (1) the nature and degree of control over the work; and, (2) the worker’s opportunity for profit or loss. Generally, this rule was considered employer-friendly.
The Biden Administration immediately began work to replace that rule. On October 11, 2022, the DOL issued a notice of proposed rulemaking that re-works the test to focus on six factors:
1. Opportunity for profit or loss depending on managerial skill
2. Investments by the worker and employer
3. Degree of permanence of the work relationship
4. Nature and degree of control
5. Extent to which the work performed is an integral part of the employer’s business
6. Skill and initiative
According to the DOL, this new test will focus on the “economic realities” of the relationship between the worker and employer. We expect a Final Rule in 2023, but also anticipate legal challenges that might extend the time before it becomes effective.
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FDCC ANNUAL INSIGHTS 2023