FSI Moves for Appeal of New DOL Independent Contractor Rule

FSI is asking the courts to allow an appeal of the U.S. Department of Labor’s latest independent contractor rule to move forward.

By Rethinking65

The Financial Services Institute is banding together with other groups to ask the courts to allow an appeal of the U.S. Department of Labor’s latest independent contractor rule to move forward.

On Jan. 12, FSI joined with the Coalition for Workforce Innovation (CWI), Associated Builders and Contractors, and the Associated Builders and Contractors of Southeast Texas to file a motion in the U.S. Circuit Court of Appeals for the Fifth Circuit requesting that it lift the stay of appeal and remand the case to the U.S. District Court for the Eastern District of Texas, Beaumont Division.

They are asking the District Court to consider whether the DOL can use the 2024 rule, finalized on Jan. 10, to replace an independent contractor rule the DOL enacted in 2021. In 2022, the District Court found that the DOL violated the Administrative Procedure Act when it first attempted to delay, and later attempted to withdraw the 2021 independent contractor rule.

“The 2021 independent contractor rule gave independent financial advisors a sense of certainty that their choice to operate as independent contractors would be preserved under FLSA (Fair Labor Standards Act),” said FSI President & CEO Dale Brown.

“Now, in light of the DOL’s new independent contractor rule, that certainty has been erased and replaced by unnecessary risk and ambiguity,” Brown continued. “Independent financial advisors rely on their independent contractor classification as they build their businesses within their communities, pay their own taxes and expenses, hire staff and serve the interests of their Main Street clients. It is imperative that independent advisors regain the clarity and certainty of their independent status. FSI is committed to this fight for independence.”

CWI’s Chair, Evan Armstrong, emphasized that, “the DOL’s 2024 Rule still falls short of the requirements under the APA and the federal district court’s opinion from 2022. For this reason, legal options are the most effective way to block this final rule from creating uncertainty in this area of law and undermining opportunities for independent work across the economy.”

The Fifth Circuit will now decide whether to remand the case to the Federal District Court where additional filings and arguments will take place to determine the legality of the 2024 rule.

Latest news

More Retirees are ‘Unretiring,’ Survey Reveals

Advisors say near-retirees and retirees are much less prepared for retirement than they think they are, according to Allspring.

Advisors Dabbling in DC Market Seek Greater Support: Cerulli

Providing them with tools, education and guidance would help them grow their retirement-plan businesses, says Cerulli Associates.

Executives Traveling on Corporate Jets Face IRS Scrutiny

Do you have executive clients who might be using a corporate jet for personal use? Tell them the IRS has announced a crackdown.

U.S. Solo Renters Age 50+ Way Up

The number living alone rose by more than half a million, but there’s been a growing trend of older people living with roommates.

SEC Settles Charges Against Former Advisor

The former advisor, Andrew Komarow, was known in the industry for working with special needs families and neurodivergent clients.

SEC Fines TIAA Unit $2.2M for Violating Reg BI

The SEC said a TIAA broker-dealer charged some retail customers too much to invest in mutual-fund choices in an IRA.