Department of Labor Rescinding Recent Joint Employment and Independent Contractor Rules Changes

The U.S. Department of Labor plans to rescind a Trump-era regulation on joint employment and an impending regulation on independent contractor use, it said in a March 11 announcement. The joint employment rule took effect in March 2020 and limited employers’ liability under the Fair Labor Standards Act. A federal district court, however, vacated large portions of the rule later that year. The independent contractor rule, originally slated to take effect in May, sought to implement an overly broad test for independent contractor status that would have harmed employees’ interests.

Rescinding of these rules changes is not a surprise. Both were considered to be anti-employee. The DOL will finalize the rescission of the joint employment and independent contractor regulations tomorrow. The rescission will fully go into effect 60 days later.