WASHINGTON, D.C.—Labor Secretary Alexander Acosta has withdrawn two Obama administration legal opinions that expanded protection for workers.
Labor Department employees were directed to use a broad definition of who is an employee versus who is a freelancer. The definition that Acosta appears to favour could allow companies to classify more workers as freelancers. Those workers would then not be subject to federal wage and hour regulations and laws.
Many small businesses use freelancers, or independent contractors, rather than hire employees.
Acosta also withdrew an opinion that broadened the definition of what’s known as a joint employer. Companies or organizations are considered joint employers if they share control over workers. The broader approach that Acosta has withdrawn theoretically raises the likelihood that, for example, a franchise parent company might be considered a joint employer with a franchisee.
Labour lawyers said Acosta’s moves have little immediate impact on current law, but indicate that the Trump administration plans to take a less aggressive approach toward enforcing wage and hour regulations and the Fair Labor Standards Act, which establishes minimum wage, overtime pay, record-keeping, and child labour standards.