For Immediate Release:
Tuesday, October 27, 2020
Laura Brewer (919) 716-6484
(RALEIGH) Attorney General Josh Stein today called on the Trump administration to withdraw a proposed rule that would strip workers of key protections under the Fair Labor Standards Act (FLSA). The proposed rule would make it easier for employers to classify employees as independent contractors, making these workers ineligible for federal minimum wage and overtime pay and increasing their taxes and other out-of-pocket costs.
“The federal government’s proposed rule would take away essential protections for workers – the protections they need to earn federal minimum wage and overtime, receive unemployment insurance, and get health care coverage,” said Attorney General Josh Stein. “This action is cruel to workers and wrong as a matter of law. Instead of devising new ways to abandon North Carolina workers—and their families—the Department of Labor would be better served creating additional protections for workers who are struggling during this pandemic.”
The FLSA was signed into law more than 80 years ago to establish a baseline of critical workplace protections, such as minimum wage and overtime, for workers across the country. The rule would:
- Expose workers reclassified or misclassified as independent contractors to tax liability.
- Increase out-of-pocket costs for these workers, including unemployment insurance, workers’ compensation, and health care coverage.
- Remove federal minimum wage and overtime pay requirements for workers, since independent contractors do not qualify for FLSA protections.
- Create confusion about whether state labor laws continue to apply to these workers.
In a letter to U.S. Department of Labor Secretary Eugene Scalia, Attorney General Stein and 23 other attorneys general argue that the rule would disregard the text and purpose of the FLSA, break with established court precedents on the definition of “employee” and independent contractor qualifications, and violate the Administrative Procedure Act. The coalition also argues that the DOL doesn’t satisfactorily explain the proposed rule or quantify how it would impact workers. This is particularly troubling in light of the ongoing COVID-19 pandemic, which has left millions unemployed and relying on workplace protections and benefits that are available to employees, not independent contractors.
Attorney General Stein is joined in sending this letter by the Attorneys General of California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Iowa, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New Mexico, New York, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia, Washington, Wisconsin, and the District of Columbia; the cities of Philadelphia and Pittsburgh, Pennsylvania; and the New York City Department of Consumer and Worker Protection and the Office of Labor Standards for the City of Chicago.
A copy of the letter is available here.