A new federal rule changing the definition of when someone is an independent contractor versus an employee could pose a “significant threat” to older working Americans’ income, security and peace of mind, according to members of the US Senate Special Committee on Aging.
Sen. Mike Braun (R-IN), the committee’s ranking member, and Sen. Rick Scott (R-FL), a member, penned a letter last week to the Department of Labor opposing the independent contractor final rule, announced Jan. 9, saying that “its rigid restrictions and confusing standard will sharply curtail older Americans’ labor market opportunities, workplace flexibility and contributions to recovery in a still volatile economy.”
Other Republicans in Congress, among them the ranking member of the Senate Health, Education, Labor and Pensions Committee as well as the House Committee on Small Business, also have expressed concerns over the rule.
The independent contractor rule, which is set to go into effect March 11, clarifies the DOL’s interpretation of the Fair Labor Standards Act’s classification of workers as independent contractors and employees. It raised concerns among senior living experts and others that providers will face greater legal and financial burdens under the rule.
Braun and Scott wrote that there “is often is less recognition that older Americans will be one of the rule’s most severely impacted demographics.”
During last week’s committee hearing focusing on assisted living safety, staffing and pricing, Braun pointed to testimony during an April 2023 committee hearing about building economic resilience for older workers. In that testimony, experts testified about the value of flexible workplace arrangements for older workers and how the rule would disproportionately harm older workers who rely on flexibility and independence.
“This hearing highlighted that older Americans make up almost 40% of independent contractors, and that older workers are more likely to be independent contractors than any other cohort of workers,” Braun and Scott’s Jan. 26 letter read. “Independent work has become more appealing to older Americans over time as life expectancy rises and Social Security retirement ages increase.”
The lawmakers said that most older Americans say that their “ideal approach” to retirement involves work in some capacity.
“Independent work helps older adults seeking more flexible hours, supplemented income or retirement savings, opportunities to attend to caregiving responsibilities, and the social and health benefits of continuing to work and remain active in communities,” the letter read. “While older Americans should not be forced to ‘un-retire’ because of financial difficulties, inflation has pushed many back into the labor market, and the rule will choke off the gig economy’s critical safety valve for these older workers.”