House Republicans Ask DOL to Withdraw Independent Contractor Rule

Republican members of the House of Representatives urged Jessica Looman, administrator of the U.S. Department of Labor’s (DOL’s) Wage and Hour Division, to withdraw the DOL’s independent contractor rule at a Feb. 14 hearing of the House Committee on Education and the Workforce. The rule takes effect March 11.

It’s time for a “course correction” at the DOL, said Rep. Kevin Kiley, R-Calif. He called on the Biden administration to replace acting Secretary of Labor Julie Su, emphasizing that the Senate declined to confirm her nomination last year. As Kiley urged withdrawal of the independent contractor rule—currently being challenged in the courts—he said he’d introduce a resolution of disapproval to nullify it.

Throughout the hearing, Looman focused on child labor violations. She noted, for example, that the DOL has had success enforcing child labor laws at a food manufacturing facility, meatpacking facility and auto manufacturer.

However, Kiley kept the hearing’s focus on the independent contractor rule. He said it would be “extremely harmful” to workers and small businesses, predicting it would deprive millions of independent contractors of their livelihoods.

In response, Looman said the U.S. economy is strongest when employees are paid what they earned on their payday. She said the vast majority of employers want to comply, but the final rule would help “protect employees misclassified as independent contractors.”

Specific Guidance Sought

Kiley wanted specific guidance from Looman on who would be an employee and who would be an independent contractor.

“Would licensed real estate agents be independent contractors or employees?” he asked, noting that the rule was hundreds of pages long.

“The independent contractor rule provides guidance,” Looman answered. When Kiley said she’d only given a “general answer,” Looman responded that the answer has always been fact-based. Kiley said it “should be an easy answer.” Real estate agents who are in business for themselves are independent contractors, she replied.

Kiley then asked about truckers. If they’re in business for themselves, they’re independent contractors, Looman said.

What about a writer for a variety of outlets? Would they be an employee or independent contractor?
There are six factors that would need to be considered, Looman said, making a reference to the rule’s following factors:

• The degree to which the employer controls how the work is done.
• The worker’s opportunity for profit or loss.
• The amount of skill and initiative required for the work.
• The degree of permanence of the working relationship.
• The worker’s investment in equipment or materials required for the task.
• The extent to which the service rendered is an integral part of the employer’s business.

“No factor or set of factors has a predetermined weight, and a totality of the circumstances of the working relationship must be considered,” Looman said in a Jan. 8, 2023, press briefing. “The six factors are not exhaustive, nor are any of them more important than any others.”

At the Feb. 14 hearing, Kiley said the DOL came up with the rule, but Looman “can’t answer” his question about whether a writer is an independent contractor or employee. “How can anyone make heads or tails of this?” he asked.

In response, Looman reiterated that employers would apply the factors to determine who is a contractor.

Rep. Ilhan Omar, D-Minn., asked about the DOL’s process in a typical misclassification investigation.

Looman answered that the department was prioritizing low-wage workers and protecting them from misclassification. That would include, for example, workers in the construction and health care industries, as well as dishwashers, she said.

Su’s Renomination Debated

As for Su, who President Joe Biden has renominated to be secretary of labor, Rep. Haley Stevens, D-Mich., called for her to be confirmed.

Kiley asked Looman if Su should be confirmed.

Looman said she would defer to the Senate confirmation process, and that she was honored and privileged to work with Su.

Kiley asked whether having an unconfirmed secretary has affected morale at the DOL. “Morale at DOL is exceptional,” Looman replied.

Legal Challenges to Overtime Rule?

Rep. Tim Walberg, R-Mich., asked whether the DOL was ready for possible legal challenges to its upcoming overtime rule.

Looman answered, “The developing rule should be protected.”

The rule’s proposed automatic increases every three years to the overtime threshold violate the notice and comment requirement of the Administrative Procedure Act, said committee Chairwoman Virginia Foxx, R-N.C.

“The automatic update complies,” Looman replied.

“We’ll see,” Foxx said.