PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

New DOL Rule Puts All Independent Contractors at Risk of Losing Their Independent Businesses and the Flexibility They Love

By at 9 January, 2024, 1:22 pm

NEWS

For Immediate Release

Washington, D.C. – Today, the U.S. Department of Labor (DOL) issued its final Independent Contractor rule. Karen Kerrigan, president & CEO of the Small Business & Entrepreneurship Council (SBE Council), issued the following response:

“Acting Labor Secretary Julie Su’s intrusive new rule is a massive blow to entrepreneurial opportunity and the flexibility and freedom entrepreneurs enjoy through independent business ownership. The rule is so pervasive and intrusive that almost any independent contractor can now be ‘misclassified’ and forced to be an employee by the federal government. That assumes, of course, that a business would keep that contractor as an employee once the government says they are ‘misclassified.’

“The six-factor test the DOL will apply to determine independent contractor status is so broad and arbitrary that any independent contractor could be considered an employee. For example, the factor that considers whether the work performed by the independent contractor is an ‘integral part of the potential employer’s business’ is simply ludicrous, as a small business would not be utilizing the expertise of accounting, marketing, consulting, etc. professionals unless it was critical to business operations and growth.

“Acting Secretary Su believes that keeping in place the 2021 rule – strongly supported by entrepreneurs and small businesses – would create disruption and uncertainty for them. Actually, it’s the new rule that will create massive uncertainty, new costs, revenue loss, and loss of opportunity for independent contractors and the small businesses that tap into their expertise. The new rule is an attack on the American dream of business ownership. SBE Council looks forward to working with our friends in the Congress to overturn the new rule, and our allies in the business community in support of possible litigation.”

CONTACT:

Karen Kerrigan, kkerrigan@sbecouncil.org

SBE Council is a nonpartisan advocacy, research and education organization dedicated to protecting small business and promoting entrepreneurship. For nearly 30 years, SBE Council has worked on and advanced a range of private sector and public policy initiatives to strengthen the ecosystem for strong startup activity and small business growth.

Visit www.sbecouncil.org for additional information. Twitter: @SBECouncil

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