A White House Memorandum effecting a freeze on non-emergency rules and regulations pending review by the new administration includes a halt to the independent contractor classification changes set to go into effect March 8, 2021. As it relates to this rule (a Final Rule published in the Federal Register that has not taken effect), the Memorandum requests postponing the effective date for 60 days from the date of the January 20, 2021, Memorandum, with further delay considered for additional review and comment periods.
The classification changes were introduced in a Final Rule to clarify and streamline the analysis for the first time under federal law to determine employee or independent contractor status by focusing the test on two “core factors” instead of the lengthy six-factor “economic realities” test. The new administration will review the Final Rule and likely issue its own proposed rule reflecting its stance on worker protections. The Biden Administration has instead discussed a federal standard modeled after the “ABC test.” For reference, California uses the ABC test, which considers workers employees as a default, and all parts of its stringent analysis must be established to prove independent contractor status.
For now, the Memorandum indicates the new administration will focus its immediate attention on emergency rules. We will continue to track the progress of a new independent contractor test-taking effect.