Attorney General Clark Joins Multistate Coalition Opposing Federal Rule That Would Harm Workers, Make Worker Misclassification Easier

Vermont joined a broad coalition of attorneys general, state labor agencies, and city labor agencies in submitting comments opposing a federal proposal that would make it harder for workers to be considered "employees" under federal law, weakening wage protections, undercutting law-abiding employers, and shifting more costs onto workers and states.

Attorney General Charity Clark today joined a multi-state coalition opposing the U.S. Department of Labor's proposed rule, which dramatically alters independent contractor status under federal law. The proposal would replace the current federal framework with a narrower approach that would substantially decrease federal labor protections for workers.

Worker misclassification happens when an employer treats a worker who should legally be considered an employee as an independent contractor, which can deny that worker wages, overtime, leave, workplace protections, and other rights tied to employee status.

That change would have significant consequences for workers and employers alike. Workers who qualify as independent contractors lose access to federal minimum wage and overtime protections, as well as other rights tied to employee status under the Fair Labor Standards Act, the Family and Medical Leave Act, and the Migrant and Seasonal Agricultural Worker Protection Act. The coalition's comment explains that the proposed rule would also create confusion for employers and state and local enforcement agencies by reviving a standard from the first Trump Administration that departs from decades of case law and longstanding practice. The proposed rule would also encourage misclassification, when employers treat workers who qualify as employees as independent contractors instead.

The comment argues that the proposal is unlawful, does not reflect the realities of today's workplace, and would worsen an already serious misclassification problem by making it easier for employers to avoid payroll taxes, minimum wage and overtime requirements, and other obligations that law-abiding employers follow.

The coalition's comment warns that the federal proposal would expose more workers to the risks of being improperly treated as independent contractors. The coalition also raised concerns that the proposed rule is out of step with the modern workplace, where employers may increasingly exercise control through surveillance technology, algorithms, scheduling systems, and other tools that a narrower test may fail to fully capture.

Key points from the coalition's comment include:

• The proposed rule would make worker misclassification easier, leaving more workers without wage, overtime, leave, and other protections tied to employee status.
• The rule would reward employers that cut corners, while putting law-abiding businesses at a competitive disadvantage.
• The proposal would cost states money by reducing payroll tax collections and employer contributions to unemployment and workers' compensation systems, while increasing enforcement and public education burdens.
• The rule would create confusion instead of clarity, and conflicts with decades of judicial precedent.

Joining Attorney General Clark in filing the comment letter are the attorneys general of Arizona, California, Colorado, Connecticut, the District of Columbia, Hawai'i, Illinois, Massachusetts, Michigan, Minnesota, New Jersey, New York, Oregon, Rhode Island, and Washington, as well as the Minnesota Department of Labor and Industry; the Oregon Bureau of Labor and Industries; the Pennsylvania Department of Labor & Industry; the Washington State Department of Labor & Industries; and the Philadelphia Office of Worker Protections and the Minneapolis Department of Civil Rights.

A copy of the comment letter is available by request.

CONTACT: Amelia Vath, Senior Advisor to the Attorney General, 802-828-3171