Commentary: Labor Department’s New Rule Is Bad News for Independent Contractors

Contract Worker

In what is sure to have significant implications for millions of American workers, specifically gig economy workers and contractors, the Department of Labor (DOL) issued its long-awaited final worker classification rule in January.

The new rule revises the process to determine whether a worker is an employee or independent contractor under the Fair Labor Standards Act. The government argues the rule is necessary to ensure that all workers are provided fair wages and overtime since independent contractors (people who work for themselves or a business on a contractual basis) are not given the same benefits, such as tax withholdings and paid time off, as traditional employees. However, this argument appears designed to mask the government’s true intention, which is to reduce the number of independent contractors in the country.

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Commentary: New Biden Labor Dept. Rule Likely to Hurt Millions of Small Businesses, Independent Contractors

Remote Worker

Some 99% of American companies are small businesses, and 100% of businesses started out small, but a recently finalized rule from the Biden administration’s Labor Department will make it harder for small businesses to start, grow and succeed.

As of last May 1, a White House news release pointed out, “Young firms, which often start small with few employees, are a driving force in job creation.” That’s been particularly true since the COVID-19 pandemic, as small businesses with fewer than 50 employees have accounted for a growing share of new jobs.

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Bill May Force Ohio Contractors to Verify Immigration Status

Contractors and larger employers in Ohio could soon be required to verify the immigration status of employers based on a proposed new law.

Reps. Scott Wiggam, R-Wayne County, and D.J. Swearingen, R-Huron, recently introduced legislation that would make contractors and subcontractors verify the immigration status of employees to work on public works construction projects.

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Arizona Representative’s Tax Bill Would Increase Contractor Filing Threshold

Arizona Rep. David Schweikert is looking to shake up federal tax policy for small business owners.

The Phoenix area lawmaker introduced a bill in June looking to increase the amount required for a business to pay before a 1099 form needs to be filled out from $600 to $5,000. Companies will typically issue a 1099 tax form to contractors who make over $600 so they can pay self-employment, or other small business tax, on their earnings.

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New Report on Minneapolis’ Southwest Light Rail Project Will Focus on Met Council Oversight of Contractors

The Office of the Legislative Auditor will release the second of two program evaluation reports as part of its 2023 audit of the Southwest light rail project on Wednesday morning.

The heavily scrutinized $2.76 billion extension of the Metropolitan Council’s light rail Green Line will span 14.5 miles between Minneapolis and Eden Prairie. It’s been under the microscope of legislators in both major parties since early 2022, when it was found to be more than $700 million over budget and four years behind its originally scheduled completion.

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Ohio Legislation Would Expand Use of Pay-for-Success Contracts

by Todd DeFeo   Ohio lawmakers are mulling a proposal to expand a program that allows the state to pay contractors only for successful services. Senate Bill 122 would allow the state treasurer to work with state agencies to enter into pay-for-success contracts with service providers for a range of services, including education, public health, criminal justice and the management of natural resources. Under a pay-for-success contract, the state would only pay a service provider if the company meets specific performance targets established as part of the agreement. The state treasurer would appoint an independent evaluator to review results and gauge the program’s success. “The pay for success model would bring private sector innovation to meet some of Ohio’s biggest challenges,” state Sen. Steve Wilson, R-Maineville, said in his prepared testimony. “Rather than paying for unproven services and hoping for good results, pay for success contracts would empower policymakers at the state and local level to invest in programs that they know will be a good use of public funds, address the issue at hand, and ultimately save taxpayer dollars.” The bill transfers oversight of the program from the director of administrative services to the state treasurer. The state House…

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