The income earned by older Americans working as freelance contractors is crucial for their financial well-being, allowing them to afford necessities and maintain independence. Many older workers prefer freelancing for the flexibility it provides, allowing them to work around health issues or other responsibilities. However, a new Department of Labor rule implemented in March has raised concerns among contractors, potentially limiting their income as they approach retirement age. This rule aims to clarify worker classification as either employees or contractors, with a six-factor test for companies to follow.
Worker misclassification has been a long-standing issue, with some companies classifying workers as contractors to avoid providing benefits or contributing to taxes. The new DOL rule seeks to address this problem, ensuring that workers are properly classified and receive fair wages. While surveys show that most independent contractors prefer their arrangement over traditional jobs, there are concerns that the new rule could unintentionally limit opportunities for legitimate contractors, including older Americans. The rule may affect groups such as women and older workers who rely on flexible work arrangements.
In light of the new rule, some independent contractors fear losing clients hesitant to work with them due to potential misclassification. Freelancers in various fields have filed lawsuits in an attempt to prevent the rule from impacting their businesses. Independent contractors like Kim Kavin, who leads a coalition of freelancers, have expressed concerns about the potential impact on their livelihoods. Kavin, along with other members of her coalition, have turned to freelancing after experiencing age discrimination in traditional job settings and value the autonomy and income that freelancing provides.
As independent contractors fight against the potential limitations imposed by the new rule, there is a broader conversation about how the government can support the workforce without restricting independent contracting. Advocates argue that encouraging options for contractors to access benefits while maintaining non-traditional arrangements could be a more effective approach. While the DOL rule aims to clarify worker classification, there are concerns about unintended consequences that could limit opportunities for freelancers, particularly older Americans seeking flexible work options as they near retirement age.
