May 7, 2021
LANSING - Advocacy by the Michigan Department of Attorney General and several other states has resulted in the U.S. Department of Labor terminating a rule put in place during the Trump administration, thus strengthening protections for working Michiganders.
The withdrawal of the rule, known as the Final Rule, was announced Wednesday.
The rule changed the test for independent contractor status, making it easier for employers to strip employees of legal protections - such as minimum wage, benefits and unemployment eligibility - by changing their classification.
The Department and many others have engaged with lead states Pennsylvania and New York since Sept. 2020 to combat the Final Rule.
The previous administration rushed the Final Rule to completion in just over three months with a truncated comment period.
Below is a timeline of events:
AG Nessel offered the following statement in response to notice of the withdrawal:
"When I took office, I was serious about protecting hardworking Michiganders. I created the Payroll Fraud Enforcement Unit in April 2019 to focus on individual allegations of wrongdoing, but also to ensure our office is engaged with national efforts to protect workers. Misclassifying workers is a significant issue here and throughout the country. It has the effect of cheating workers and robbing them of statutory protections-minimum wage, overtime pay, workers' disability compensation, and eligibility for unemployment benefits-while also imposing higher tax burdens. The prior administration's attempt to expand the scope of who can be considered an independent contractor is just plain wrong and hurts Michigan families at a time when they need as much assistance as possible. I applaud the states' efforts and the Biden administration's willingness to withdraw the Final Rule. This is a significant win for Michigan workers."