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.
