Voglio sapere a riguardo di…

jbell on DSKJLSW7X2PROD with RULES3

Federal Register / Vol. 86, No. 4 / Thursday, January 7, 2021 / Rules and Regulations the relative investment of the drivers with that of the coal company or ask whether they were on a similar footingthey obviously were not.
Instead, the Court ruled that the drivers were independent contractors, in part because they had the opportunity for profit from sound management of their investment. Id. at 719. What matters is not the relative size of a workers investment, but whether the worker has a meaningful opportunity for profit or loss based on that investment.
The second shortcoming discussed at Section IIIB is the need for guidance regarding which economic reality factors are more probative. AI 20151
exacerbates this shortcoming by relegating the more probative control factor while elevating the less probative integral part factor. In particular, AI
2015 stated that the control factor should not overtake the other factors of the economic realities test. Such guidance is plainly inconsistent with cases in which control explicitly overtakes other factors. See, e.g., Saleem; 854 F.3d at 147 whatever the permanence or duration of Plaintiffs affiliation with Defendants, both its length and the regularity of work was entirely of Plaintiffs choosing citation omitted; Selker Bros. 84 F.3d at 147
Given the degree of control exercised by Selker over the day-to-day operations of the stations, this use of special skills cannot be said to support a conclusion of independent contractor status..
Deemphasizing the control factor is also at odds with commonsense logic;
control over the work seems to be extremely probative as to whether an individual is in business for himor herself. In addition to de-emphasizing a highly probative factor, AI2015 also states that courts have found the integral factor to be compelling, citing Snell, 875 F.2d at 811 and Lauritzen, F.2d at 153738 for support. But both cited cases actually analyzed the integral part factor as an afterthought:
Each devoted only a few conclusory sentences to this factor after more in depth analysis of the other factors Snell, 875 F.2d at 811 and Lauritzen, 835 F.2d at 153738. The integral part factor falls short of even an afterthought in the Fifth Circuit, which typically does not analyze it at all. As explained in Section IVD5, the integral part factoras used in AI 20151 to mean a workers importance to a businessis not supported by Supreme Court precedent and may send misleading signals in many cases.
The third shortcoming discussed at Section IIIC is overlaps between economic reality factors, which undermines the structural benefits of a
VerDate Sep<11>2014

19:58 Jan 06, 2021

Jkt 253001

multifactor test by blurring the lines between factors. One type of overlap highlighted by the NPRM is the importation of the analysis of initiative and business judgment, which are already part of the control and opportunity factors, into the skill factor, thus diluting the consideration of actual skill to the point of irrelevance.
85 FR 60607. Id. AI 20151 reinforces this problem by focusing the skill factor entirely on initiative and business judgment, thus eliminating consideration of skill: A workers business skills, judgment, and initiative, not his or her technical skills, will aid in determining whether the worker is economically independent. The withdrawn guidance makes clear that it is not simply that skill matters less than initiative, but that skill matters not at all, because it unequivocally states that specialized skill do not indicate that workers are in business for themselves.
This categorical statement, however, is supported by more circumspect case law explaining that skill is not itself indicative of independent contractor status. AI 20151 quoting Superior Care, 84 F.2d at 1060 emphasis added; see also id. the use of special skills is not itself indicative of independent contractor status quoting Selker Bros. 949 F.d at 1295 emphasis added. AI 20151s categorical position is also at odds with the Supreme Courts instruction in Silk that skill required may be important for decision. 331 U.S. at 716; see also Simpkins, 893 F.3d at 966 whether Simpkins had specialized skills, as well as the extent to which he employed them in performing his work, are material issues.
Further, reinstating AI 20151 or otherwise adopting a six-factor test with overlapping factors and without guidance regarding the factors relative probative value would negate the overall beneficial effects that would likely result from this rule, which are discussed above.
For these reasons, the Department declines commenters requests to reinstate AI 20151.The Department further notes that, unlike this rule, AI
20151 was issued without notice and comment and thus did not benefit from helpful input from the regulated community.
3. Codifying Californias ABC Test The most stringent regulatory alternative to the Departments proposed rule would be to codify the ABC test recently adopted under Californias state wage and hour law to distinguish between employee/

PO 00000

Frm 00075

Fmt 4701

Sfmt 4700

1241

independent contractor statuses.254 As described by the California Supreme Court in Dynamex, the ABC test presumptively considers all workers to be employees, and permits workers to be classified as independent contractors only if the hiring business demonstrates that the worker in question satisfies each of three conditions: a That the worker is free from the control and direction of the hirer in connection with the performance of the work, both under the contract for the performance of the work and in fact; and b that the worker performs work that is outside the usual course of the hiring entitys business;
and c that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed. 416
P.3d at 34.255 In justifying the adoption of such a stringent test, the Dynamex court noted the existence of an exceptionally broad suffer or permit to work standard in Californias wage and hour statute, id. at 31,256 as well as the more general principle that wage orders are the type of remedial legislation that must be liberally construed in a manner that serves its remedial purposes. Id. at 32.
On its face, Californias ABC test is far more restrictive of independent contracting arrangements than any formulation of an economic reality 254 See Dynamex, 416 P.3d 1; Assembly Bill A.B. 5, Ch. 296, 20192020 Reg. Sess. Cal.
2019 codifying the ABC test articulated in Dynamex; A.B. 2257, Ch. 38, 20192020 Reg. Sess.
Cal. 2020 exempting certain professions, occupations, and industries from the ABC test that A.B. 5 had codified. The ABC test originated in state unemployment insurance statutes, but some state courts and legislatures have recently extended the test to govern employee/independent contractor disputes under state wage and hour laws. See Keith Cunningham-Parmeter, Gig-Dependence: Finding the Real Independent Contractors of Platform Work, 39 N. Ill. U. L. Rev. 379, 40811 2019 discussing the origins and recent expansion of the ABC test.
255 Californias ABC test is slightly more stringent than versions of the ABC test adopted or presently under consideration in other states. For example, New Jersey provides that a hiring entity may satisfy the ABC tests B prong by establishing either: 1
That the work provided is outside the usual course of the business for which the work is performed, or 2 that the work performed is outside all the places of business of the hiring entity. N.J. Stat. Ann.
43:2119i6AC. The Department has chosen to analyze Californias ABC test as a regulatory alternative because businesses subject to multiple standards, including nationwide businesses, are likely to comply with the most demanding standard if they wish to make consistent classification determinations.
256 See Cal. Code Regs., tit. 8, 11090, subd. 2D
Employ means to engage, suffer, or permit to work.. The Dynamex court noted that Californias adoption of the suffer or permit to work standard predated the enactment of the FLSA and was therefore not intended to embrace the Federal economic reality test that subsequently developed.
416 P.3d at 35.

E:FRFM07JAR3.SGM

07JAR3