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Federal Register / Vol. 86, No. 4 / Thursday, January 7, 2021 / Rules and Regulations
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held the opposite view and highlighted the economic downturn related to COVID19. For example, the Center for Innovation in Worker Organization claimed that high unemployment increases the likelihood that employers fail to pay minimum wage. Because this rule is focused on independent contractors, even assuming the premise of the comment from the Center for Innovation in Worker Organization is correct, this concern does not directly apply. Further, this commenter did not provide clear evidence that independent contracting does not help workers supplement their income.
6. Opportunities To Work for Multiple Customers In the NPRM, the Department noted that independent contractors may more easily work for multiple companies simultaneously. The Washington Center disputed this claim, asserting that economists have found that about 75
percent of workers receiving nonemployee compensation are tied to one employer and the likelihood of being tied to a single employer is similar for wage earners and contractors.238 But the economists whom the Washington Center cites in support of their assertion explicitly noted that the independent contractors in their study include
those who are primarily employed at a W2 job, and vice versa. 239 This overlap prevents meaningful comparisons between independent contractors and W2 employees for the purpose of this RIA. Rebecca Kelly Slaughter, a Commissioner at the FTC wrote:
Independent contractor status is not what allows a worker to work for two rivals. Indeed, many hourly workers are employed at more than one job, including for two employers who are rivals in the same industry.
Commissioner Slaughter gave an example of a worker who holds two jobs at competing fast food restaurants, but this does not undermine the Departments discussion of independent contractors being able to use mobile applications to pick which tasks they choose to perform in real time on a jobby-job basis. That fast food worker cannot always decide which job he wants to work for each shift of the day.
Additionally, Slaughter commented that working for multiple employers may demonstrate a workers need to hold multiple jobs to pay bills rather than being indicative of flexibility. This JPMorgan Chase Institute, JPMorgan Chase Institute 2019, https www.jpmorganchase.com/
institute/research/labor-markets/report-opecities.htm.
238 Collins et al. 2019, supra note 80.
239 Id. at 14 n.7.

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point, however, was not substantiated by data showing that such a critique can effectively be applied across the universe of millions of independent contractors who cite flexibility as a core motivator. And as explained in Sections IIIA and IVC, courts have repeatedly explained that need for income is not the correct legal lens through which to analyze whether a worker is an independent contractor or employee under the FLSA.240 Lastly, she noted that Uber has been known to discourage multi-apping by monitoring whether drivers were logging into more than one platform simultaneously and penalizing those that did not exclusively take Uber customers. 241
Under this rule, Ubers monitoring and controlling certain drivers ability to multi-app would be a consideration under the control factors of the economic reality test as applied to those drivers. See Razak, 951 F.3d at 14546
including drivers contention that while online for Uber, they cannot also accept rides through other platforms in list of disputed facts regarding control. But it appears that the majority of rideshare drivers are able to multi-app.242 The Department believes that economy-wide data reveal that many independent contractors hold multiple jobs,243 and they resoundingly prize the flexibility to work when, where, and how they choose.244
G. Regulatory Alternatives Pursuant to its obligations under Executive Order 12866,245 the Department assessed three regulatory alternatives to the standard promulgated in this final rule. These three 240 See, e.g., Halferty, 821 F.2d at 268 It is not dependence in the sense that one could not survive without the income from the job that we examine, but dependence for continued employment;
DialAmerica, 757 F.2d at 1385 The economicdependence aspect of the economic reality test does not concern whether the workers at issue depend on the money they earn for obtaining the necessities of life..
241 Commissioner Slaughter cited a note submitted as background material for an OECD
meeting and a law review article to support this contention. See M. Steinbaum, Monopsony and the Business Model of Gig Economy Platforms, OECD
7 Sept. 17, 2020, https one.oecd.org/document/
DAF/COMP/WD201966/en/pdf; M. Steinbaum, Antitrust, the Gig Economy, and Labor Market Power, 82 Law and Contemp. Probs. 45, 55 2019, https scholarship.law.duke.edu/cgi/
viewcontent.cgi?article=4918&context=lcp.
242 See This App Lets Drivers Juggle Competing Uber and Lyft Rides, Wired Feb. 15, 2018
estimating that over 70 percent of rideshare drivers multi-app, https www.wired.com/story/this-applets-drivers-juggle-competing-uber-and-lyft-rides/.
243 Lim et al., supra note 75, at 61.
244 See the May 2017 CWS supplement to the CPS.
245 Exec. Order No. 12866 6a3Ciii, 58 FR
51741.

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alternatives are the same as those analyzed in the NPRM,246 listed below in order from least to most restrictive of independent contracting: 247
1 Codification of the common law control test, which applies in distinguishing between employees and independent contractors under various other Federal laws; 248
2 Codification of the traditional sixfactor economic reality balancing test, as recently articulated in WHD Opinion Letter FLSA20196; and 3 Codification of the ABC test, as adopted by the California Supreme Court in Dynamex Operations W., Inc. v.
Superior Court, 416 P.3d 1 Cal.
2018.249
Although the Department believes that legal limitations preclude adoption of the common law and ABC test alternatives listed above, the Department notes that Congress is presently considering separate bills that would amend the FLSA to adopt these alternatives,250 and accordingly presents them for the benefit of the public as recommended by OMB guidance.251 All 246 See 85 FR 60634 discussing regulatory alternative to the proposed rule.
247 OMB guidance advises that, where possible, agencies should analyze at least one more stringent option and one less stringent option to the proposed approach. OMB Circular A4 at 16.
248 See 26 U.S.C. 3121d2 generally defining the term employee under the Internal Revenue Code as any individual who, under the usual common law rules applicable in determining the employer-employee relationship, has the status of an employee; 42 U.S.C. 410j similarly defining employee under the Social Security Act; see also, e.g., Community for Creative Non-Violence v.
Reid, 490 U.S. 730, 751 1989 applying principles of general common law of agency to determine whether . . . work was prepared by an employee or an independent contractor under the Copyright Act of 1976; Darden, 503 U.S. 318
holding that a common-law test should resolve employee/independent contractor disputes under ERISA.
249 See also Hargrove v. Sleepys, LLC, 106 A.3d 449, 465 N.J. 2015 extending the ABC test to state wage claims in New Jersey.
250 The Modern Worker Empowerment Act, H.R.
4069, 116th Cong. 2019 introduced by Rep. Elise Stefanik, would amend Sec. 3e of the FLSA
statute to clarify that the term employee is determined under the usual common law rules as applied for purposes of section 3121d of the Internal Revenue Code of 1986. See also S. 2973, 116th Cong. 2019 companion Senate bill introduced by Sen. Tim Scott. By contrast, the Worker Flexibility and Small Business Protection Act, H.R. 8375, 116th Cong. 2020 introduced by Rep. Rosa DeLauro would, among other provisions, amend the FLSA and other labor statutes to clarify that an individual performing any labor for remuneration shall be considered an employee and not an independent contractor unless such individual passes the ABC test discussed in this analysis. See also S. 4738, 116th Cong. 2020
companion bill introduced by Senators Patty Murray and Sherrod Brown.
251 OMB Circular A4 advises that agencies should discuss the statutory requirements that affect the selection of regulatory approach. If legal
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