HARRISBURG – Attorney General Josh Shapiro is calling for the Trump Administration to stop the implementation of a proposed rule that would strip workers of key protections provided under the Fair Labor Standards Act.
The proposed rule — issued by the Wage and Hour Division of the U.S. Department of Labor — would make it easier for employers to change the classification of workers from employees to independent contractors, removing these workers from federal minimum wage and overtime pay requirements and increasing taxes and other out-of-pocket costs for workers.
The action, from a coalition of 24 attorneys general plus the cities of Philadelphia and Pittsburgh, and city agencies in New York and Chicago, is in the form of a comment letter to Labor Secretary Eugene Scalia calling on his agency to withdraw the rule and ensure the protection of U.S. workers.
“The proposed rule is illegal and will harm workers in Pennsylvania and across the country by increasing misclassification, stripping workers of key employment protections like minimum wage, overtime, and paid leave,” Attorney General Shapiro said. “Issuing the proposal in the midst of a global pandemic, while workers and employers are struggling, is indefensible. I’m pleased to lead this strong coalition against the proposal with my colleagues in New York and Massachusetts.”
The Fair Labor Standards Act was signed into law over 80 years ago to establish a baseline of critical workplace protections, such as minimum wage and overtime, for workers across the country. The coalition — led by New York Attorney General Letitia James, Massachusetts Attorney General Maura Healey, and Pennsylvania Attorney General Shapiro — argues the proposed rule would disregard the statutory text and purposes of the FLSA and break with established court precedents on the definition of “employee” and what qualifies as an independent contractor. By making this change, the Department of Labor would specifically:
- Expose workers reclassified or misclassified as independent contractors to tax liability,
- Increase out-of-pocket costs for workers reclassified or misclassified — including unemployment insurance, workers’ compensation, and health care coverage, and
- Remove federal minimum wage and overtime pay requirements for workers since independent contractors do not qualify for FLSA protections, and further create confusion about whether state labor standards laws continue to apply to such workers.
The coalition says the proposed rule is particularly troubling in light of the ongoing COVID-19 pandemic, which has left millions unemployed. The consequences of reclassification or misclassification at this time are a concern to workers who rely on workplace protections and benefits only available to employees, including wage and hour standards, employer-provided health insurance, and paid leave programs.
The coalition is asking DOL to withdraw the proposed rule immediately.
Joining Attorneys General James, Healey, and Shapiro in filing this letter are the attorneys general of California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Iowa, Maine, Maryland, Michigan, Minnesota, New Jersey, New Mexico, North Carolina, Oregon, Rhode Island, Vermont, Virginia, Washington, Wisconsin, and the District of Columbia; the cities of Philadelphia and Pittsburgh, and the New York City Department of Consumer and Worker Protection and the Office of Labor Standards for the City of Chicago.
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