Study Finds Trump Era Independent Contractor More Beneficial To Workers

Last week, Connecting the Dots reported the Coalition for a Democratic Workplace (CDW), which MSCI is a member of, filed an amicus brief on February 11 before the National Labor Relations Board (NLRB) regarding Atlanta Opera.

This case deals with the agency’s independent contractor standard. The NLRB plans to revert back to the Obama-era standard that severely undervalued the significance of a worker’s entrepreneurial opportunity for economic gain when considering whether to classify them as an employee or independent contractor.

Now a new study released by Bloomberg Law has found the contractor test developed under President Trump actually resulted in a higher rate of workers being classified as employees protected by federal labor law compared to the standard set by the Obama administration. This outcome was a boon for workers, but it also means that employers have more clarity under the Obama-era standard.

Specifically, the analysis found workers were classified as employees in 91 percent of the decisions, prevailing in 10 of 11 cases, compared with 71 percent success rate (17 of 24 decisions) under the Obama administration’s test. This analysis suggests that while workers were emboldened to test their independent contractor status under the more stringent Obama-era standard, they were significantly less successful under those rules.

Bloomberg Law concluded that, for employers who are trying to preemptively ensure their workers are properly classified, the certainty of the Trump-era standard is beneficial. Read more here.