OAKLAND – California Attorney General Rob Bonta today joined a coalition of 20 public labor enforcement offices in filing a comment letter opposing the U.S. Department of Labor’s (DOL) reinstatement of the first Trump Administration’s independent contractor rule. The Trump Administration’s proposal would upend the “economic realities test” currently used under the federal Fair Labor Standards Act (FLSA) — a test that has long been recognized by courts to determine whether workers are economically dependent enough on employers to classify them as employees. In the comment letter, the coalition urges DOL to withdraw this proposal, which would put workers at increased risk of misclassification by unlawfully broadening the definition of an independent contractor and upending previous standards implementing the FLSA.
“At a time when Americans are facing unprecedented economic challenges, the Trump Administration wants to gut workers’ rights and benefits,” said Attorney General Bonta. “When workers are misclassified, they lose out on critical benefits such as overtime and minimum wage, paid sick leave, and unemployment insurance. I, alongside a coalition of public officials nationwide, call on the Administration to withdraw this proposal immediately.”
Worker misclassification occurs when an entity inappropriately treats its employees as independent contractors, thereby evading legal obligations such as minimum wage, overtime, and payroll taxes. This misclassification is detrimental to workers, states, and law-abiding employers.
First, misclassified workers are typically not entitled to the basic legal protections owed to employees. Additionally, misclassification results in lost revenue and increased administrative burdens and costs to states. Due to misclassification, states suffer from a loss of tax revenue they would otherwise receive from payroll taxes and a loss of funds to unemployment insurance, workers’ compensation, and paid leave programs. States also incur additional costs, such as providing healthcare coverage and hospital costs for uninsured workers, as misclassified workers cannot access benefits like employer-provided health insurance, 401(k) plans, or unemployment insurance, and often lack appropriate workers’ compensation coverage. Finally, misclassification hurts employers who play by the rules. Employers that properly classify employees and run their business in accordance with wage and hour laws often operate at a competitive disadvantage when competing for the same work with employers that skirt the law.
In the comment letter, the coalition urges the Trump Administration to withdraw its proposal to weaken the test used to determine whether workers are independent contractors, asserting that:
Attorney General Bonta is committed to defending workers’ rights. Through the Attorney General’s office, including the Worker Rights and Fair Labor Section, Attorney General Bonta enforces California’s laws to protect the welfare of California workers from cracking down on no-poach agreements and worker misclassification to standing up for federal workers amidst the Trump Administration’s trampling of workers’ rights and mass firing agenda.
In filing the comment letter, Attorney General Bonta joins the attorneys general of Arizona, Colorado, Connecticut, District of Columbia, Hawai’i, Illinois, Massachusetts, Minnesota, New Jersey, New York, Oregon, Rhode Island, Vermont, Washington, Pennsylvania’s Department of Labor & Industry, Minnesota’s Department of Labor and Industry, Oregon’s Bureau of Labor & Industries, Washington’s Department of Labor & Industries, City Philadelphia’s Office of Worker Protections, and Minneapolis Department of Civil Rights.
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