Independent contractors and employees are protected in Michigan under a new law. | Pixabay
Independent contractors and employees are protected in Michigan under a new law. | Pixabay
On Jan. 6, the U.S. Department of Labor announced a new rule to protect independent contractors, a rule meant to clarify how business owners must classify individuals as independent contractors or employees under the Fair Labor Standards Act.
The criteria for classification as independent contractors or employees includes two factors, which the Mackinac Center calls key to the question. Those criteria are whether an individual has control over their work, and their ability to partake in profit or loss.
“This is a positive move to help safeguard protections for employees while preserving the independence of those working for themselves. California's experience with AB 5 demonstrates the disastrous impact that restricting independent work has on people’s businesses and livelihoods,” said F. Vincent Vernuccio, senior fellow at the Mackinac Center for Public Policy. “Direct attacks on independent contractors and the gig economy as a whole are growing. This rule will protect the firmly rooted American tradition of being your own boss.”
The Mackinac Center was one of many organizations and individuals that submitted a comment in support of the rule.
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