An industry lobby group applauds the Ministry of Labourthe failure of the courts to strike down a Trump-era rule on the distinction between employees and independent contractors.
On Tuesday, the U.S. District Court for the Eastern District of Texas ruled that the DOL’s decision last May to delay and withdraw its independent contractor rule violated the Administrative Procedure Act. The rule supported an “economic reality” test for determining whether a person is an independent contractor or an employee, reducing it to the distinction between the nature and degree of control over the work and the possibility of profit or loss from the person.
the Financial Services Institute supported the court’s decision.
ISP, with with associated builders and contractorsthe Southeast Texas Associate Builders and Contractors and the Workforce Innovation Coalitionhad filed a lawsuit challenging the DOL’s decision to delay and withdraw the rule.
“The court correctly ruled that the independent contractor’s removal from DOL did not follow administrative process. The reinstatement of the DOL’s Independent Contractor Rule brings clarity and certainty to independent financial advisors and independent financial services companies,” said FSI’s President and CEO. Dale Brown said in a statement.
The FSI claimed the rule’s withdrawal created uncertainty for advisers, as noted.
The organization, which includes more than 80 member independent financial services firms and more than 130,000 affiliated financial advisers, has been adamant about what it says is protecting the rights of independent financial advisers.
Last month, the group spoke out against the president Joe BidenThe FSI’s calls for passing a pro-union law that the FSI says would harm financial advisers working independently by limiting their choice, as noted.
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