AHLA statement on resolution to overturn independent contractor rule

Independent contractor rule

WASHINGTON (March 7, 2024) – American Hotel & Lodging Association (AHLA) Interim President & CEO Kevin Carey issued the following statement today after Sen. Bill Cassidy, R-LA, and Rep. Kevin Kiley, R-Calif., introduced a Congressional Review Act (CRA) resolution to overturn the Department of Labor’s independent contractor rule.

“In one of the toughest labor markets in history, the Labor Department’s new rule would limit opportunities for individuals to work as independent contractors and hurt hotels’ ability to maintain operations,” said AHLA Interim President & CEO Kevin Carey. “AHLA applauds Sen. Cassidy and Rep. Kiley for their leadership on this issue, and we look forward to working with lawmakers on both sides of the aisle to get this measure to the president’s desk.”

The Department of Labor’s new independent contractor regulation vastly complicates the process for classifying workers as independent contractors or employees and will create costly new uncertainties.

The regulation, which is scheduled to take effect March 11, invites confusion and litigation by establishing a test where any of six different factors could be determinative of employee status, as opposed to DOL’s prior regulation, under which two core factors guided classification determinations.

Additionally, the regulation introduces a vague mandate forcing businesses to consider the “economic realities” of the relationship between a worker and a company as well as an undefined set of “additional factors” that must also be considered.

The regulation will increase liability for businesses and reduce opportunities for those interested in working as independent contractors, a status many workers prefer because it gives them more flexibility and autonomy over their work. This will make it more costly and time consuming for hoteliers to hire the independent contractors they need, harming the industry’s ability to maintain operations and reducing business opportunities for independent contractors.