The Financial Services Institute isn’t staying silent about the U.S. Department of Labor’s plans to appeal a Texas federal judge’s March ruling that invalidated the DOL’s withdrawal of the independent contractor rule. The Trump-era rule, scheduled to go into place last year, would clarify under the Fair Labor Standards Act how to determine whether workers are employees or independent contractors.
“We are disappointed in the DOL’s decision to appeal the District Court ruling,” FSI President & CEO Dale Brown said in mid-May. “The DOL’s independent contractor rule provides much-needed certainty to independent financial advisors who have chosen to be independent contractors so that they can operate their own business and better serve their clients within their communities. We plan to continue working to defend our members’ independent contractor status through the appeal process.”
In March, the U.S. District Court for the Eastern District of Texas ruled that the DOL’s delay and withdrawal of its independent contractor rule violated the Administrative Procedures Act. The DOL repealed the rule on May 6, 2021, one day before its delayed effective date.
That month, FSI joined the Associated Builders and Contractors, Inc. (ABC); the Associated Builders and Contractors of Southeast Texas (ABCSETX); and the Coalition for Workforce Innovation (CWI) in filing a complaint challenging the DOL’s withdrawal of its independent contractor rule.
At the time of that filing, Brown said, “Independent financial advisors choose to be independent contractors — many of them voluntarily switching from an employee advisor model – so that they can operate their own business and better serve their clients. Inspired by the entrepreneurial spirit, independent advisors build their businesses within their communities, develop their own books of business, pay their own taxes, hire their own staff and rely on their business’ success.
Since 2004, FSI has advocated on behalf of more than 80 independent financial services firm members and their 130,000-plus affiliated independent financial services firms through advocacy, education and public awareness.