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Joint Complaint Challenges 2024 DOL Independent Contractor Rule

Joint Complaint Challenges 2024 DOL Independent Contractor Rule. Independent contractor rule, department of labor, DOL, broker-dealer, financial services institute, FSI, independent contractor

An amended, joint complaint challenging the 2024 independent contractor rule was filed against the U.S. Department of Labor in the U.S. District Court for the Eastern District of Texas by Financial Services Institute, the Associated Builders and Contractor, the American Trucking Association, the Coalition for Workforce Innovation, the National Retail Federation, the National Federation of Independent Business, and the U.S. Chamber of Commerce.

Per previous reporting from The DI Wire, DOL released its final independent contractor rule earlier this year. The rule provides guidance on proper classification and seeks to combat employee misclassification and the compromising of workers’ rights to minimum wage and overtime pay. Proponents of the rule assert that independent contractor classification often facilitates wage theft, allows some employers to undercut their law-abiding competition, and hurts the economy at-large.

The latest complaint argues that the rule is arbitrary and capricious under the Administrative Procedure Act and also violates the Regulatory Flexibility Act. The plaintiffs request that the court declare the 2024 rule invalid, prohibit its implementation, and allow the 2021 Independent Contractor Rule to remain in effect.

“Independent financial advisers choose to be independent so that they can operate their own businesses and better serve their clients. We remain committed to ensuring our members maintain that choice and have security in their classification status. Our members should not have to risk losing their independent contractor status because, for example, they are complying with federal and state securities rules,” said Dale Brown, president and chief executive officer of Financial Services Institute.

“The 2021 Independent Contractor Rule helped provide much-needed certainty and clarity regarding our financial adviser members’ classification as independent contractors. However, the 2024 rule renews uncertainty, creating burdens for advisers and firms which ultimately increases costs and limits Main Street Americans’ access to professional financial advice, products and services,” Brown added.

 

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