Atlanta, Georgia – A group of freelance writers and editors has filed a lawsuit against the U.S. Department of Labor, challenging the legality of the Biden administration’s new rule that makes it harder for companies to classify workers as independent contractors. The four freelancers filed the lawsuit in a federal court in Georgia, arguing that the recently unveiled rule, which they consider to be vague, violates the U.S. Constitution. This lawsuit is the first to challenge the rule, which is set to take effect on March 11.
The plaintiffs claim that the new rule is expected to increase labor costs for industries that heavily rely on contract labor or freelancers, such as trucking, manufacturing, healthcare, and app-based gig services. They are seeking a temporary order to block the rule while the lawsuit proceeds. The U.S. Department of Labor has not yet responded to the lawsuit.
The purpose of the rule, according to the Labor Department, is to provide clarity regarding the classification of workers as either independent contractors or employees, who are entitled to legal protections like minimum wage and overtime pay. However, the freelancers argue that the department did not sufficiently explain its decision to abandon a simpler rule implemented during the Trump era, which was favored by business groups.
The 2021 rule emphasized two main factors in determining worker classification: the level of control a company has over a worker and the worker’s ability to make a profit or experience a loss. In contrast, the new rule considers additional factors such as job permanence, required skill level, initiative, and whether the work performed is essential to the company’s business. The freelancers argue that these vague criteria provide businesses with insufficient guidance to comply with the rule’s demands.
Furthermore, the freelancers express concern that the new rule will lead to uncertainty and fear of liability risks, potentially causing them to lose business. They have enlisted the representation of the Pacific Legal Foundation, a libertarian group.
In summary, a group of freelance workers in Georgia is challenging the U.S. Department of Labor’s new rule that changes how companies classify workers as independent contractors. The freelancers argue that the rule is unconstitutional due to its vagueness and claim that it will increase labor costs for various industries. While the Department of Labor aims to clarify worker classification, the plaintiffs contend that the new rule lacks guidance and explanation, and they fear potential business losses.