When the U.S. Department of Labor revised the standard for classifying workers as independent contractors early in 2024, representatives from many different industries objected. Construction firms, rideshare services, home health providers and other companies rely heavily on non-employee workers, and are seeking to undo the change. Under the new rule, numerous businesses claim that they would face much higher costs for health coverage, overtime pay and other benefits accorded to employees, but not independent contractors.
In response to the change, lawsuits have been filed in several states by companies and business groups aiming to block or limit the federal government’s ability to enforce these new rules. Parties opposing the revision contend that the updated regulations could stifle economic growth, impose undue burdens on employers and reduce opportunities for workers who prefer the flexibility of independent contractor status.
Government attorneys assert that objections to the revision are overstated, and that the shift merely makes it harder for businesses that seek to work around the law by falsely labeling employees as independent contractors. Along with healthcare coverage, applicability of wage and hour laws could make a significant difference in the lives of workers who are presently referred to as contractors. Should they be reclassified as employees, these individuals would have to be paid minimum wage, and most would be eligible for the time-and-a-half overtime premium starting with the 41st hour worked in a week. This is why some trucking companies, technology firms and other businesses that often require extra-long hours are looking to block the new rule.
Factors that can be evaluated when determining a worker’s status include the following:
- Degree of control that the company has over the worker
- Whether the worker can earn a profit or suffer a loss based on their managerial skill
- Permanence of the relationship between the parties
For some workers, the outcome could have a mixed impact. Some freelance writers have expressed concerns that it might be more difficult to get jobs if they must receive the full scope of benefits and protections provided to employees under the Fair Labor Standards Act and other laws.
Whether you’re a worker or a business, The Reddy Law Firm, P.C. can advise you on how a worker-company relationship should be categorized under the law. Our firm handles a wide range of Georgia employment law claims, including disputes over unpaid wages and overtime. Please call 678-629-3246 or contact us online to make an appointment. Our office is in Alpharetta.
