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SACRAMENTO, October 27, 2020 – California Attorney General Xavier Becerra today joined a coalition of 24 attorneys general — as well as local authorities in Chicago, New York City, Philadelphia, and Pittsburgh — in a comment letter opposing a proposed regulation by the U.S. Department of Labor (DOL) that threatens to result in the misclassification of employees across the country as independent contractors. The proposal upends the test currently used under the federal Fair Labor Standards Act (FLSA) that determines whether workers are entitled to critical employee protections such as paid sick leave, overtime, and unemployment insurance. In the comment letter, the coalition urges the Trump Administration to withdraw the unlawful proposal.
“We shouldn’t be gutting worker rights at a time when Americans across the country are already reeling from an unprecedented economic and public health crisis,” said Attorney General Becerra. “This pandemic has shown the critical importance of basic protections like unemployment insurance and paid sick leave. Instead of expanding access to those benefits, the Trump Administration is jamming through a proposal that would hurt workers everywhere. Here in California, we know that working families are what drive our economy. It’s time for the Trump Administration to remember that. We’re calling on the federal government to withdraw this proposal.”
On September 22, 2020, DOL announced a notice of proposed rulemaking that would create new regulations interpreting whether workers are employees or independent contractors under the FLSA. The proposal breaks with court precedent and DOL’s own prior interpretations of the FLSA to create an interpretative rule that will result in workers being misclassified as independent contractors, robbing them of critical employee protections. Under the proposal, the existing federal test to determine employee status — which considers a number of factors equally — would be severely curtailed, eliminating some traditional factors and unreasonably elevating others. For instance, under the proposal, DOL would no longer specifically consider the extent to which services rendered are an “integral” part of the principal’s business. Further, despite the fact that the proposal raises complex legal questions that will impact workers across the country and cost private businesses hundreds of millions of dollars, DOL has broken with decades of precedent to jam through the proposal on a truncated timeframe, refusing requests by attorneys general across the country to allow the public a meaningful opportunity to comment on the proposed changes. Although California law continues to provide strong worker protections, weaker federal standards place a greater burden on state enforcement efforts and put workers across the country at greater risk of workplace exploitation.
In the comment letter, the Attorneys General assert:
- The proposed rule would increase misclassification of workers and make enforcement of labor standards more difficult;
- Issuing the proposed rule in the midst of a global pandemic and without adequate consideration of the consequences to workers raises significant concerns; and
- The proposed rule violates the Administrative Procedure Act and is inconsistent with the text and purpose of the FLSA.
Attorney General Becerra is committed to protecting hardworking Americans and their families in California and across the country. Last week, Attorney General Becerra — alongside the City Attorneys of Los Angeles, San Diego, and San Francisco — secured an appellate court decision affirming an earlier preliminary injunction against Uber and Lyft for unlawful misclassification of their drivers, cheating taxpayers and robbing workers of critical employee protections. In June, the Attorney General urged Walmart to step up efforts to protect workers and the public during COVID-19. In May, he slammed the President’s reckless executive order forcing meat and poultry processing plant employees to work without adequate protections during the current public health crisis. In March, the Attorney General secured a settlement preventing Burger King, Popeyes, and Tim Hortons from using “no-poach” provisions in franchise contracts, which make it more difficult for workers to seek better pay and benefits at competing franchises.
In filing the comment letter, Attorney General Becerra joins the attorneys general of New York, Massachusetts, Pennsylvania, 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 coalition also includes the Cities of Philadelphia and Pittsburgh, Pennsylvania; the New York City Department of Consumer and Worker Protection; and the Office of Labor Standards for the City of Chicago.
A copy of the comment letter is available here.