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Federal Register / Vol. 86, No. 86 / Thursday, May 6, 2021 / Rules and Regulations
courts of appeals have considered the workers investment in the work in comparison to the employers investment in its business,140 as does WHD in enforcement actions. As the Fifth and Eighth Circuit decisions demonstrate, courts may give the relative comparison of investments little weight in certain factual circumstances or make nuanced decisions regarding how much evidence of the employers investment to allow. Accordingly, precluding consideration of the workers and the employers relative investments would have very little legal support, would have been contrary to numerous courts of appeals decisions as well as the totality-of-the-circumstances approach applied by courts,141 and would have been an unfounded limit on factfinders ability to pursue inquires that best differentiate between a workers economic dependence and independence based on the particular facts of the case.

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c. Disregarding the Importance or Centrality of a Workers Work to the Employers Business The Independent Contractor Rule would have recast the factor examining whether the workers work is an integral part of the employers business as whether the work is part of an Parrish, 917 F.3d at 383. In sum and contrary to what the Rule would have provided, the Fifth Circuit routinely considers the relative investments of the worker and the potential employer even if the factor may ultimately be accorded little weight depending on the circumstances. And in the Eighth Circuits decision in Karlson, the court affirmed the district courts decision to allow some evidence of the workers and the employers relative investments but not allow the worker to introduce evidence of the employers overall investment i.e., large dollar figures that would create the danger of unfair prejudice. 860 F.3d at 1096.
140 See, e.g., McFeeley, 825 F.3d at 243
comparing the potential employers payment of rent, bills, insurance, and advertising expenses to the workers limited investment in their work;
Keller, 781 F.3d at 810 We agree that courts must compare the workers investment in the equipment to perform his job with the companys total investment, including office rental space, advertising, software, phone systems, or insurance.; Baker v. Flint Engg & Constr. Co., 137
F.3d 1436, 1442 10th Cir. 1998 In making a finding on this factor, it is appropriate to compare the workers individual investment to the employers investment in the overall operation.;
Lauritzen, 835 F.2d at 1537 disagreeing that the overall size of the investment by the employer relative to that by the worker is irrelevant and finding that that the migrant workers disproportionately small stake in the pickle-farming operation is an indication that their work is not independent of the defendants; see also Iontchev v. AAA Cab Service, Inc., 685 Fed. Appx. 548, 550
9th Cir. 2017 noting that the drivers invested in equipment or materials and employed helpers to perform their work but concluding that the investment factor was neutral because the cab company leased taxicabs and credit card machines to most of the drivers.
141 See supra note 106.

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integrated unit of production. 142 The Rule rejected as irrelevant to this factor whether the work is important or central i.e., integral to the employers business.143 Instead, the Rule would have provided that the relevant facts are the integration of the worker into the potential employers production processes because what matters is the extent of such integration rather than the importance or centrality of the functions performed by the worker.144
The Rule asserted that this recast articulation was supported by Rutherford Food which considered whether the work was part of the integrated unit of production of the employer,145 but acknowledged that WHD and courts typically consider whether the work is important or central.146 The proposal to withdraw the Rule identified this factors redefinition to integrated unit of production as another example of how the Rule would eliminate from the economic realities analysis facts and concepts that have a strong foundation in the courts and WHDs application of the analysis and would narrow the scope of the analysis.147
A number of commenters who supported the proposed withdrawal objected to the Rules narrowing of the integral factor. For example, Farmworker Justice commented that the Department was correct to identify the Rules removal of consideration of the works importance to the business purpose as inconsistent with the law. The State Officials stated that, under well-established circuit court precedent, the relevant inquiry is whether the workers work is an integral part of the business, which could be satisfied by being part of an integrated unit, or by being integral to the business. Texas RioGrande Legal Aid asserted that, by removing consideration of whether farmworkers perform tasks integral to the businesses of the growers to whom they provide services, the Rule would have stacked the decks in favor of a narrower definition of farm-based employee. The AFLCIO added that the Rule would have narrowed the meaning of the integral factor and was contrary to Congress intent and otherwise unjustified for several reasons, including because it would have been inconsistent with Supreme Court and 142 See 86 FR at 119396, 1247
795.105d2iii.
143 See id. at 119395.
144 Id. at 1195.
145 See id. at 119394 citing Rutherford Food, 331 U.S. at 729.
146 See id. at 1193.
147 See 86 FR 1403334.

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Circuit Court precedent and because it appears to be intended to provide transportation network companies like Uber and Lyft with a regulatory basis for their argument that their drivers are not their employees. The International Brotherhood of Teamsters objected for similar reasons, arguing that the Rules barring any consideration of whether the work performed is important or otherwise integral to the employers business is in direct contradiction of established precedent and was undertaken to facilitate the recognition of gig workers as independent contractors.
Commenters who opposed the proposal to withdraw did not share concerns regarding this factor. The Center for Workplace Compliance stated that many courts have found the former integral part framing of the factor as overlapping with the ability to control work and that the integral part factor can inappropriately be interpreted to focus on the importance of the work instead of integration. It agreed with the Rule that reframing this factor to look at whether the work is part of an integrated unit of production . . . is much closer to how the factor has been historically interpreted by the Supreme Court.
Other commenters who opposed the proposal generally objected to the proposals assertion that the Rule would have narrowed the factors, see, e.g., U.S.
Chamber of Commerce, or generally supported the Rules articulation of the factors, including the integrated unit factor, see, e.g., TechServe Alliance.
Having considered the comments and the issue further, the Department believes that the Rules narrowing of the integral part factor to exclude consideration of whether the work is central or important was not supported.
As the Rule acknowledged, WHD and courts have been applying the integral part factor for decades,148 and it is a longstanding factor within the economic realities analysis. This is because a worker who performs work that is integral to the employers business is more likely to be economically dependent on the employer; 149 whereas a worker who performs work that is more peripheral to the employers business is more likely to be independent from the employer.
Moreover, as with the other ways in which the Rule would have limited the analysis, the Rules exclusion of whether the work is important or central to the employers business is 148 See 86 FR at 1194 citing WHD opinion letters and cases.
149 See DialAmerica Mktg., 757 F.2d at 138283.

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