Earlier this month, the Department of Labor (DOL) issued its final rule on classification of independent contractors. This standard is intended to protect workers, including construction workers, truck drivers, and ride-share drivers, from being taken advantage of and denied benefits like overtime pay. The new rule provides a six-point test for determining the correct classification of a worker, including criteria like the amount of skill required to perform the work and the permanence of the working relationship.
The new rule, however, has drawn criticism, including from independent financial advisors, who believe this interpretation could undermine their status as independent contractors and uproot their business model. While thew new rule is scheduled to take effect on March 11th, Constangy Wage and Hour Compliance and Litigation practice group co-chair, James Coleman, wouldn't be surprised if court or congressional challenges delay or derail its implementation. He spoke with Financial Planning about the potential for litigation in the coming weeks and months.
"I tend to think it's going to promote more, not less, litigation over the issues," James suggests. "And the unfortunate part is, you know, there's not clarity at all. And that normally means, when there's a lack of clarity, that you're going to end up with more litigation."
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James Coleman serves as co-chair of Constangy's Wage and Hour Compliance & Litigation practice group, as well as the managing partner for the firm's Washington D.C. and Northern Virginia offices. With a career spanning four decades, he has dedicated himself to defending numerous employers in wage and hour class and collective litigation as well as administrative proceedings. James specializes in the restaurant and food service industry, providing focused expertise in this sector. In addition to his litigation work, he offers extensive guidance to employers on various labor law matters, including wage and hour standards, child labor restrictions, occupational safety and health standards, and employment discrimination.