Today, the U.S. District Court for the Eastern District of Texas ruled that the Department of Labor’s (DOL) delay and withdrawal of its independent contractor rule was in violation of the Administrative Procedures Act. As a result of this decision, the independent contractor rule is effective as of March 8, 2021, the rule’s original effective date. The rule clarifies a long-standing ‘economic reality test’ to determine whether a worker is an employee or independent contractor under the Fair Labor Standards Act (FLSA).
The Financial Services Institute (FSI) joined the Associated Builders and Contractors (ABC), Inc.; the Associated Builders and Contractors of Southeast Texas (ABCSETX); and the Coalition for Workforce Innovation (CWI) as co-plaintiffs in the legal compliant challenging the Department’s delay and withdrawal of the rule.
Below is a statement from Dale Brown, FSI President & CEO:
“The court appropriately ruled that the DOL’s independent contractor withdrawal did not follow administrative procedure. Restoring the DOL’s independent contractor rule provides clarity and certainty for independent financial advisors and independent financial services firms. Our members can now operate their businesses and serve their Main Street clients confidently knowing that their choice to be independent is secure under FLSA.”
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