American Hotel & Lodging Association Supports Legislative Effort to Overturn New Independent Contractor Rule

Friday, March 8, 2024

Kevin Carey, the Acting President and CEO of the American Hotel & Lodging Association (AHLA), expressed support for Sen. Bill Cassidy, R-LA, and Rep. Kevin Kiley, R-Calif., following their introduction of a resolution under the Congressional Review Act (CRA) aimed at reversing the Department of Labor’s new rule on independent contractors.

“In one of the toughest labor markets in history, the Labor Department’s new rule would limit opportunities for individuals to work as independent contractors and hurt hotels’ ability to maintain operations,” said AHLA Interim President & CEO Kevin Carey. “AHLA applauds Sen. Cassidy and Rep. Kiley for their leadership on this issue, and we look forward to working with lawmakers on both sides of the aisle to get this measure to the president’s desk.”

Background

The new regulation introduced by the Department of Labor significantly complicates the criteria for determining whether workers should be classified as independent contractors or employees, introducing new challenges and potential costs for businesses.

Set to be implemented on March 11, this regulation adds layers of complexity and potential for legal disputes by instituting a test in which the status of an employee could hinge on any of six distinct factors, a departure from the previous guidance that relied on two primary factors for such classifications.

Moreover, the regulation mandates a broad consideration of the “economic realities” of the worker-company relationship, along with an unspecified array of “additional factors.” This ambiguous directive is likely to increase legal liabilities for companies and diminish the opportunities available to individuals who seek the independence and flexibility that comes with being an independent contractor.

For sectors such as hospitality, the regulation poses significant obstacles, increasing the costs and bureaucratic hurdles associated with hiring independent contractors. This could negatively impact the industry’s operational capacity and limit the prospects for independent contractors, undermining the advantages of flexibility and autonomy that many workers value.

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