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Department of Labor Withdraws Final Rule on Definition of Independent Contractor

On May 5, 2021, the Department of Labor (DOL) announced the withdrawal of the January 7, 2021 Final Rule on the Fair Labor Standards Act (FLSA) definition of independent contractor. The withdrawal became effective on May 6, 2021 with this Federal Register publication.

DOL in its press release states that the “department is withdrawing the rule for several reasons, including: [t]he independent contractor rule was in tension with the FLSA’s text and purpose, as well as relevant judicial precedent; the rule’s prioritization of two “core factors” for determining employee status under the FLSA would have undermined the longstanding balancing approach of the economic realities test and court decisions requiring a review of the totality of the circumstances related to the employment relationship; and the rule would have narrowed the facts and considerations comprising the analysis of whether a worker is an employee or an independent contractor, resulting in workers losing FLSA protections.”

TechServe Alliance CEO Mark Roberts on April 12, 2021 and October 26, 2020 submitted comments supporting the previous Administration’s proposed independent contractor rule as it applied to the IT and engineering staffing industry. Roberts stated, “TechServe supports the pending Final Rule which provides clarity to both IT and engineering independent contractor entrepreneurs and our members who want to hire them. Should DOL withdraw the Final Rule, we urge DOL to engage the Small Business Administration and industries such as ours to develop workable, innovative solutions to this complex issue.”

The ability for high-tech entrepreneurs to continue to self-select independent contractor status is a TechServe Alliance Legislative and Regulatory priority. While the TechServe-supported IC Rule was withdrawn, our Team will continue to participate in legislative and regulatory efforts and follow litigation developments.

On March 26, 2021, a coalition filed a lawsuit against the Biden Administration for violating the Administrative Procedures Act regarding the steps taken to withdraw the IC Rule. That litigation is pending.

USCIS Suspends Biometric Screening for H-4, L-2, and E visas

On May 7, 2021, USCIS announced effective May 17, 2021 the suspension of biometric screening requirements. USCIS officials previewed this announcement in a May 3, 2021 affidavit filed in pending litigation, Edakunni et al v. Mayorkas (U.S. District Court, Western District of Washington).

The biometric requirements, implemented in March 2019, were causing significant backlogs. On March 22, 2021, the American Immigration Lawyers Association filed the class action. A group of business organizations, including the U.S. Chamber of Commerce, Microsoft, and the National Association of Manufacturers, filed an amicus brief on April 29, 2021 in support of the plaintiffs.

The suspension applies to new and pending cases where appointments have not yet been scheduled. In addition to suspending the biometric requirement, USCIS assigned additional workers to process the files. TechServe will continue to monitor this issue.

JD Supra, “USCIS Suspends Biometrics for Some to Improve Processing Time,” May 7, 2021

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