House Freedom Caucus Urges Trump to Undo Department of Labor Interpretation of Independent Contractor Rules

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North Carolina Congressman, Mark Meadows, the incoming chairman of the conservative House Freedom Caucus, used a meeting with President-Elect Donald Trump to deliver a list of 232 regulations that the Freedom Caucus suggest he should immediately repeal upon assuming office.  Among the “regulations” which the Caucus urges the President-Elect to repeal  is the “Misclassification of Employees as Independent Contractors.”  The list provided by the Caucus does not identify the particular regulation or ruling it has in mind,but the date cited in the list suggests they are referring to Department of Labor Administrator’s Interpretation No. 2015-1 , issued July 15, 2015.  The DOL interpretation affirms the use of the so-called “economic realities test” for distinguishing between employees and independent contractors.  As the Freedom Caucus list somewhat inartfully explains, the DOL interpretation “Disproportionately burdens independent contractors such as Uber and Lyft.”  The transition team has not yet taken a position on the request, though it seems likely to find a receptive ear from the incoming administration as recently announced cabinet appointments appear to signal a more business friendly approach.  Time will tell whether the administration is inclined to act on the request and, if so, the extent to which it impacts litigation against sharing economy companies such as Uber and Lyft, and other companies, such as Flower Foods, that have faced even more widespread litigation over the employment status of their independent contractor delivery drivers.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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