At the end of March, the United States Senate rejected the nomination of Dr. David Weil to head the Department of Labor’s Hour and Wage Division. Senators Manchin (D-WV), Kelly (D-AZ), and Sinema joined all Senate Republicans in rejecting the nomination. Had Dr. Weil’s nomination been successful, he would have returned to a position he held between 2014 and 2017, once again being responsible for enforcing the “federal minimum wage, overtime pay, recordkeeping, and child labor requirements of the Fair Labor Standards Act.”
The Senate’s rejection of Dr. Weil represents a win for independent contractors who will no longer have to face an individual who has sought to deny them the opportunity to earn income outside a traditional nine-to-five job.
In 2020, Upwork estimated that 59 million Americans worked as independent contractors and made $1.3 trillion in annual earnings in 2021. In addition, a study from MBO Partners suggested that 87% of independent contractors “say they are happier” and 78% “say they are healthier” with the flexibility independent contracting offers compared to traditional employment. Other studies have suggested that 78% of independent contractors cite “schedule flexibility as a key reason” for working as independent contractors. In addition, in October 2021, Statistica found that 80% of independent contractors were satisfied, well above the national average of just 53.7%.
Despite the growing importance of independent contracting to the American economy and the overwhelming popularity of the employment structure, the Biden administration has pledged a crackdown. While campaigning for the presidency, then-candidate Biden pledged to crackdown on firms that use independent contractors and revoked a Trump administration rule that would have provided greater clarity for gig workers and independent contractors shortly after entering office.
Weil’s track record as the Department of Labor’s Wage and Hour Division administrator provides clear evidence of the danger he presented to independent contractors. For example, in 2015, he issued an Administrators Interpretation (AI) that held “misclassification of employees as independent contractors is found in an increasing number of workplaces in the United States” and that under the Federal Labor Standards Act, “most workers are employees.” Had Weil been successfully nominated, he would undoubtedly have continued his attack on independent contractors.
Weil created substantial uncertainty with an economic realities test in the same AI. As noted by the U.S. Chamber of Commerce, the economic realities test that considered “the nature and degree of the employer’s control; the permanency of the worker’s relationship with the employer; the amount of the worker’s investment in facilities, equipment, or helpers; the amount of skill, initiative, judgment, and foresight required for the worker’s services; the worker’s opportunities for profit or loss; and the extent of the integration of the worker’s services into the employer’s business.”
Unfortunately, Weil’s economic realities test did not weigh the relative importance of each factor, creating substantial uncertainty for businesses and contractors. As the U.S. Chamber of Commerce noted, “an employer would never be able to tell whether they had properly classified a worker as an employee or an independent contractor until the WHD made the determination.” Had Weil’s nomination been successful, he would undoubtedly have created more uncertainty for businesses and denied millions of Americans the ability to find work outside traditional employment.
Dr. Weil’s nomination has not gone unnoticed among independent contractors. In a January 2022 op-ed, the founders of Fight for Freelancers warned that Weil’s nomination is part of a wider pattern of lawmakers and regulators “actively trying to destroy” the livelihoods of Americans who choose alternative forms of employment. While the Senate has handed independent contractors a win by rejecting Dr. Weil’s nomination to serve as administrator of the Department of Labor’s Wage and Hour Division, it’s entirely possible that the Biden administration will nominate someone equally, if not more, as hostile to those who want to earn outside a traditional job. Hopefully, the U.S. Senate will stand up for contractors again and reject any nominee seeking to limit worker freedoms.