Independent Contractor Misclassification and Compliance News December 2024

As the independent workforce continues to grow, so do the issues of worker compliance and misclassification. It is important for enterprises to remain informed about the latest laws, regulations, and developments surrounding these topics. Each month, we bring you the latest news stories from around the web.

Trump Announces that his Nominee to be the Secretary of Labor will be Representative Lori Chavez-DeRemer

President-elect Donald Trump recently announced his intention to nominate Representative Lori Chavez-DeRemer to be the Secretary of Labor. Representative Chavez-DeRemer served one term in Congress representing Oregon. She was elected in 2022 but lost her re-election bid in 2024.

Representative Chavez-DeRemer’s likely nomination has brought to light her support for the Protecting the Right to Organize (PRO) Act. The PRO Act is legislation designed to strengthen workers’ rights to unionize and collectively bargain. It also includes a provision to expand the definition of “employee” to include many individuals currently classified as independent contractors by adopting the ABC test for determining worker classification.

The ABC test is considered the strictest test for determining if workers are employees or independent contractors. Massachusetts and California have adopted the ABC and many workers that might be classified as independent contractors in other states must be classified as employees in California and Massachusetts. It involves meeting the following standards:

1. The worker is free from the control and direction of the hiring entity in connection with the performance of the work.
2. The work performed is outside the usual course of the hiring entity’s business.
3. The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.

Representative Chavez-DeRemer co-sponsored the PRO Act during her term in Congress. But beyond co-sponsoring the bill, her public support for the legislation appears limited. She did not issue a press release or make public statements supporting the PRO Act and did not introduce any amendments to advance the act. She did co-sponsor a bill to make it easier for public employees to bargain collectively, but her overall score with the AFL-CIO is 10%, which is only slightly better than the Republican average of 6% (compared to the average Democrat score of 99%).

Since Trump’s announcement that she would be his nominee for the Department of Labor, Representative Chavez-DeRemer has not made any public statements reaffirming her support for the PRO Act.

The PRO Act is not likely to pass and her support for it is only one indication of what she might be like as Secretary of Labor. However, it might be too soon to conclude that she will be more pro-employee than the first Trump Administration. If she were to pursue a more pro-employer agenda, she would not be the first political appointee to adopt the administration’s approach over what might be their own personal opinion.

We may learn more about Representative Chavez-DeRemer as the nomination process continues and whether her support for the PRO Act will be indicative of her terms as Secretary of Labor.

For more information, check out our resources page on misclassification and compliance. If you have any questions about engagement, classification, or management of your independent workforce, we’re always here to help.