The Power and Communications Contractors of America (PCCA), alongside the U.S. Chamber of Commerce and numerous other business advocacy organizations, signed a letter in support of Congressional Review Acts (CRA) H.J. Res 98 and/or S.J. Res 49. These CRAs would nullify the U.S. Department of Labor's (DOL) problematic Final Rule on Employee or Independent Contractor Classification under the Fair Labor Standards Act (FLSA).

The rule went into effect on March 11, though its fate is uncertain as several legal challenges are underway. The rule introduces confusion and uncertainty for businesses when defining independent contractors, reducing the flexibility and control that employees and companies have over their work activities and ultimately posing great harm to the American business community. 

Despite widespread criticism, the DOL has persisted in replacing the 2021 rule's framework, which determined independent contractor status using two core factors: control over work and opportunity for profit or loss. PCCA supported the 2021 rule.

Now, the DOL has mandated the use of a burdensome six-factor test to determine a worker’s classification: the opportunity for profit or loss depending on managerial skill, investments by the worker and the potential employer, degree of permanence of the working relationship, nature and degree of control, the extent to which the work performed is an integral part of the potential employer’s business, and skill and initiative. 

As a representative of many businesses subject to the harmful rule, PCCA encourages timely passage of the CRAs, both providing for congressional disapproval of the Standard for Determining Joint Employer Status. "The American people don’t want the government telling them how to start or manage a business," H.J. Res. 98, sponsor Rep. John James (R-Mich.) stated following his introduction of the CRA. "Small businesses are the backbone of our economy and have helped millions, including my family, achieve the American Dream. Bureaucrats don’t create jobs; businesses create jobs. I’m proud to stand up and fight for small businesses in my district and districts across the country.”

These CRAs foster hope for our industry and the business community as a whole. Looking forward, in order to nullify a federal regulation under a CRA, a resolution must pass both the House and Senate and later be signed by the President. If the President vetoes it, Congress can override the veto with a two-thirds majority in both chambers. Therefore, urge lawmakers to consider the negative impact of the new independent contractor classification at every stage of the process.

The 2021 rule was created a mere three years ago, based on decades of court precedent, and there has been little proof it was ineffective. It was written "to promote certainty for stakeholders, reduce litigation, and encourage innovation in the economy," as we later cited in the letter. Overturning it is nothing but counterproductive, reducing efficiencies introduced in 2021 and wasting time and resources that could be better spent addressing legitimate issues. 

PCCA stands firmly with the broader business community in advocating for the rejection of the DOL's Final Rule on Employee or Independent Contractor Classification. We believe that the passage of H.J. Res. 98/S.J. Res. 49 will be crucial to preserving the integrity of our workforce and the entrepreneurial spirit that drives our economy. We call on Congress to prioritize the passage of these resolutions in order to protect the rights and preferences of businesses and workers alike.