Biden DOL Revokes Three Eleventh-Hour Trump DOL Opinion Letters

Kollman & Saucier
Kollman & Saucier
01/27/2021

In its final days under the Trump administration, the Department of Labor (DOL) had advanced three opinion letters on independent contracting and tip-pooling rules.  On Tuesday, the DOL’s Wage and Hour Division revoked the letters under the Biden administration’s regulatory review freeze

The independent contracting rule would have permitted a simpler legal standard for classifying workers as independent contractors rather than employees covered by minimum wage and overtime laws.  The rule considered five factors to determine whether a worker is economically dependent on an employer with the greatest focus on the nature and degree of the employer’s control over the work and the worker’s opportunity for profit or loss based on personal initiative.  We blogged about this DOL opinion letter last week.

It also withdrew the tip pooling rule that would have permitted restaurants to pay more of their tipped employees below the federal minimum wage (at $2.13 per hour) regardless of how much time workers spent on tasks that do not generate tips.  Previously, tipped workers who spent at least 20% of their workweek on tasks that do not produce tips (certain “sidework” activities like rolling silverware or cleaning) were entitled to full minimum wage for that time worked.  This new tip pooling rule also provided, less controversially, that employers (defined to include supervisors and managers) were prohibited from participating in tip-pooling arrangements.

We will continue to provide future updates on these and other changes that are unfolding under the new administration.

 

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