Department of Labor Renews Focus on Worker Classification Enforcement

April 23, 2021

The Biden administration’s chief wage and hour regulator has directed DOL investigators to place an emphasis on independent contractor misclassification and joint employment relationships as part of a new enforcement focus.  Stricter regulations on both issues are likely forthcoming as well. 

"We need to figure out who an employer is, and we need to figure out who the employee is,” said Jessica Looman, the principal deputy administrator and acting leader of the Department of Labor’s Wage and Hour Division, in an interview with Bloomberg Law, “in order to get [workers] the protection under the law.” 

New rules expected:  The Biden Department of Labor is expected to issue its own worker classification and joint employer regulations, although the move to withdraw the Trump-era independent contractor rule is currently under legal challenge. 

More funding, more staff for enforcement:  The Wage and Hour Division is gearing up for the new enforcement directives by seeking a significant increase to its funding and staff.  Earlier this month, the White House proposed a budget for the 2022 fiscal year that included spending $14.2 billion on the Department of Labor—a 14% increase in the agency’s annual budget.  The proposed budget increase—at least in part—was specifically aimed at increasing enforcement resources.  Whether the proposed budget receives congressional approval is unclear, but it is possible that it could be pushed through as part of the next reconciliation bill.