Freelancers Sue Labor Department Over New Contracting Rule

A group of freelancers is suing the U.S. Department of Labor (DOL) over a new rule that encourages employers to classify independent contractors as employees. Independent contractors perform services for companies but are not deemed employees. Many companies retain them instead of hiring employees in order to save money. Contractors have to pay their own taxes. After the year ends, they receive a 1099 IRS form if they billed more than $600. The new rule, which is scheduled to come into force on March 11, comes in the wake of California’s controversial law known as AB5 that virtually outlaws independent contracting and clamps down on the gig economy. Critics say the state law is intended to benefit labor unions and will drive up costs for businesses. The U.S. Supreme Court has turned away challenges to the state law, most recently in June 2022....