The National Retail Federation (NRF) has expressed strong reservations about the US Department of Labor’s finalised rule on independent contractor classification.

Specifically, the rule decides whether a worker may be considered an independent contractor.

David French, senior vice-president of Government Relations at the NRF, issued a statement condemning the decision, highlighting its potential impact on various industries.

Retailers, similar to many other employers, engage in diverse business relationships with independent contractors for essential services, including billing, facility maintenance, data analysis, delivery, and marketing.

These collaborations have become increasingly crucial in the wake of the post-Covid-19 environment.

Repealing rules sparks concerns

French criticised the administration’s move to repeal what he considers “common-sense rules” that clearly distinguish between employees and independent contractors.

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By GlobalData

The NRF strongly opposes this change, deeming it unwarranted and unnecessary. The concern is that the decision may lead to confusion, prolonged legal battles, and a stifling of innovation in the business sector.

Detrimental impact on workers

While the NRF acknowledges the adverse effects on retailers and employers, French emphasises that the rule is even more detrimental to the millions of workers across the country who value the opportunity to engage in independent work.

The fear is that the decision could limit the flexibility and options available to these workers in the evolving job market.

The NRF had previously submitted comments on the proposed rule in December 2022 and voiced opposition upon its release in October 2023.

The organisation remains steadfast in its stance against the changes and urges a reconsideration of the Department of Labor’s decision.