NAHB and ABC oppose DOL’s contractor decision

The National Association of Home Builders (NAHB) and Associated Builders and Contractors (ABC) both said they are opposed to the Department of Labor’s (DOL) move to withdraw the independent contractor rule.

The rule was finalized in January during the last days of the Trump administration. But now, both associations say that withdrawing the rule muddies the waters for the contactor community and could harm small businesses.

“While we certainly saw this coming, it is still disappointing to see the Department of Labor chose to rescind the independent contractor final rule, which would have provided much-needed clarity for the contracting community, employers, and employees,” said Ben Brubeck, ABC vice president of regulatory, labor and state affairs. “The withdrawal will harm small businesses and the entire construction industry.”

According to Brubeck, the latest move by the DOL is a violation of the Administrative Procedure Act and places contractors within inadequate standards previously in place. ABC also said that the result could be additional damage to the economy while depriving independent workers of opportunities to succeed.

“ABC has already filed a federal court complaint challenging the Department of Labor’s unlawful delay of the rule’s effective date beyond March 8. We intend to amend our complaint to contest the department’s claimed authority to withdraw the rule, which compounds the department’s violation of APA requirements.”

The NAHB previously submitted comments opposing the withdrawal and said that it believes the final independent contractor rule represented a positive step forward.  The rule provided additional guidance in regard to allowing employers to determine whether a worker is an independent contractor or an employee under the Fair Labor Standards Act (FLSA).

In making the announcement to withdraw the rule, the DOL cited the reasons:

• The independent contractor rule was in tension with the FLSA’s text and purpose, as well as relevant judicial precedent.
• The rule’s prioritization of two “core factors” for determining employee status under the FLSA would have undermined the longstanding balancing approach of the economic realities test and court decisions requiring a review of the totality of the circumstances related to the employment relationship.
• The rule would have narrowed the facts and considerations comprising the analysis whether a worker is an employee or an independent contractor, resulting in workers losing FLSA protections.

ABC said that it has already filed a federal court complaint challenging the DOL’s “unlawful delay” of the rule’s effective date beyond March 8. 

“We intend to amend our complaint to contest the department’s claimed authority to withdraw the rule, which compounds the department’s violation of APA requirements,” Brubeck said.