There is more clarity about whether Texans may be classified as independent contractors or employees by business owners, thanks to a rule put in place on Jan. 6, by the U.S. Department of Labor.
The new rule says that two issues can determine whether a Texas resident is an independent contractor or an employee under the Fair Labor Standards Act. Those are: whether they have the ability to take part in profit or loss, and if they have control over their own work (meaning when and where they do it).
The Mackinac Center for Public Policy, in Michigan, was one of many groups and individuals that submitted comments on the new rule, and F. Vincent Vernuccio, senior fellow at the center, issued a statement this week.
“This is a positive move to help safeguard protections for employees while preserving the independence of those working for themselves. California's experience with AB 5 demonstrates the disastrous impact that restricting independent work has on people’s businesses and livelihoods,” he said. “Direct attacks on independent contractors and the gig economy as a whole are growing. This rule will protect the firmly rooted American tradition of being your own boss.”