Federal Register / Vol. 86, No. 41 / Thursday, March 4, 2021 / Rules and Regulations 12535 

• Newark Liberty International 

Airport (EWR), New Jersey; and 

• Los Angeles International Airport 

(LAX), California. 

This direction considers a person to 

have recently traveled from the DRC or 

the Republic of Guinea if that person 

departed from, or was otherwise present 

within, the DRC or the Republic of 

Guinea within 21 days of the date of the 

person’s entry or attempted entry into 

the United States. Also, for purposes of 

this document, crew and flights carrying 

only cargo (i.e., no passengers or noncrew), are excluded from the applicable 

measures set forth in this notification. 

This direction is subject to any changes 

to the airport landing destination that 

may be required for aircraft and/or 

airspace safety as directed by the 

Federal Aviation Administration. 

This list of designated airports may be 

modified by the Secretary of Homeland 

Security in consultation with the 

Secretary of Health and Human Services 

and the Secretary of Transportation. 

This list of designated airports may be 

modified by an updated publication in 

the Federal Register or by posting an 

advisory to follow at www.cbp.gov. The 

restrictions will remain in effect until 

superseded, modified, or revoked by 

publication in the Federal Register. 

For purposes of this Federal Register 

document, ‘‘United States’’ means the 

territory of the several States, the 

District of Columbia, and Puerto Rico. 

Alejandro N. Mayorkas, 

Secretary, U.S. Department of Homeland 

Security. 

[FR Doc. 2021–04594 Filed 3–2–21; 4:15 pm] 

BILLING CODE 9112–FP–P 

DEPARTMENT OF LABOR 

Wage and Hour Division 

29 CFR Parts 780, 788, and 795 

RIN 1235–AA34 

Independent Contractor Status Under 

the Fair Labor Standards Act (FLSA): 

Delay of Effective Date 

AGENCY: Wage and Hour Division, 

Department of Labor. 

ACTION: Final rule; delay of effective 

date. 

SUMMARY: Consistent with the 

Presidential directive as expressed in 

the memorandum of January 20, 2021, 

from the Assistant to the President and 

Chief of Staff, titled ‘‘Regulatory Freeze 

Pending Review,’’ this action finalizes 

the Department of Labor’s proposal to 

delay until May 7, 2021, the effective 

date of the rule titled Independent 

Contractor Status Under the Fair Labor 

Standards Act (‘‘Independent Contractor 

Rule’’ or ‘‘January 2021 Rule’’), which 

was published in the Federal Register 

on January 7, 2021, to allow the 

Department to review issues of law, 

policy, and fact raised by the rule before 

it takes effect. 

DATES: As of March 4, 2021, the 

effective date of the Independent 

Contractor Rule published January 7, 

2021 at 86 FR 1168 is delayed until May 

7, 2021. 

FOR FURTHER INFORMATION CONTACT: 

Amy DeBisschop, Division of 

Regulations, Legislation, and 

Interpretation, Wage and Hour Division, 

U.S. Department of Labor, Room S– 

3502, 200 Constitution Avenue NW, 

Washington, DC 20210; telephone: (202) 

693–0406 (this is not a toll-free 

number). Copies of this final rule may 

be obtained in alternative formats (Large 

Print, Braille, Audio Tape or Disc), upon 

request, by calling (202) 693–0675 (this 

is not a toll-free number). TTY/TDD 

callers may dial toll-free 1–877–889– 

5627 to obtain information or request 

materials in alternative formats. 

Questions of interpretation or 

enforcement of the agency’s existing 

regulations may be directed to the 

nearest Wage and Hour Division 

(‘‘WHD’’) district office. Locate the 

nearest office by calling the WHD’s tollfree help line at (866) 4US–WAGE ((866) 

487–9243) between 8 a.m. and 5 p.m. in 

your local time zone, or log onto WHD’s 

website at https://www.dol.gov/ 

agencies/whd/contact/local-offices for a 

nationwide listing of WHD district and 

area offices. 

SUPPLEMENTARY INFORMATION: 

I. Background 

On January 7, 2021, the U.S. 

Department of Labor (‘‘the Department’’) 

published the Independent Contractor 

Rule in the Federal Register with an 

effective date of March 8, 2021. See 86 

FR 1168. The Independent Contractor 

Rule would, among other actions, 

introduce into title 29 of the Code of 

Federal Regulations a new part (part 

795) titled ‘‘Employee or Independent 

Contractor Classification Under the Fair 

Labor Standards Act.’’ See id. In a 

memorandum dated January 20, 2021, 

and titled ‘‘Regulatory Freeze Pending 

Review,’’ published in the Federal 

Register on January 28, 2021 (86 FR 

7424) (‘‘Regulatory Freeze 

Memorandum’’), the Assistant to the 

President and Chief of Staff, on behalf 

of the President, directed the heads of 

Executive Departments and Agencies to 

consider delaying the effective dates of 

all regulations that had been published 

in the Federal Register but had not yet 

taken effect. The Independent 

Contractor Rule fell within this 

category. The Regulatory Freeze 

Memorandum states that the purpose of 

such delays is for agencies to review any 

questions of fact, law, and policy that 

the rules may raise, noting certain 

exceptions that do not apply to the 

Independent Contractor Rule. On 

January 20, 2021, the Office of 

Management and Budget (OMB) also 

published OMB Memorandum M–21– 

14, Implementation of Memorandum 

Concerning Regulatory Freeze Pending 

Review, which provides guidance 

regarding the Regulatory Freeze 

Memorandum. See OMB Memorandum 

M–21–14, Implementation of 

Memorandum Concerning Regulatory 

Freeze Pending Review, https://

www.whitehouse.gov/wp-content/ 

uploads/2021/01/M-21-14-RegulatoryReview.pdf (last visited February 25, 

2021). OMB Memorandum M–21–14 

explains that pursuant to the Regulatory 

Freeze Memorandum, agencies ‘‘should 

consider postponing the effective dates 

for 60 days and reopening [the] 

rulemaking processes’’ for ‘‘rules that 

have not yet taken effect and about 

which questions involving law, fact, or 

policy have been raised.’’ Id. 

On February 5, 2021, the Department 

issued a notice of proposed rulemaking 

(NPRM) in accordance with the 

Regulatory Freeze Memorandum and 

OMB Memorandum M–21–14 proposing 

to delay the effective date of the 

Independent Contractor Rule to May 7, 

2021, which would be 60 days beyond 

its original effective date. See 86 FR 

8326. 

In the NPRM, the Department 

explained that delaying the effective 

date of the Independent Contractor Rule 

would give the Department additional 

opportunity to review and consider the 

Independent Contractor Rule, as the 

Regulatory Freeze Memorandum and 

OMB Memorandum M–21–14 

contemplate. The Department noted that 

the Independent Contractor Rule would 

be its first generally applicable 

regulation addressing the question of 

who is an independent contractor and 

thus not an employee under the FLSA, 

and would adopt a new legal standard 

for determining employee and 

independent contractor status under the 

FLSA. In light of the significance of this 

change, the Department proposed to 

allow itself more time to further review 

and consider, among other important 

issues, the legal, policy, and/or 

enforcement implications of adopting 

that standard, such as: Whether the 

January 2021 Rule effectuates the 


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12536 Federal Register / Vol. 86, No. 41 / Thursday, March 4, 2021 / Rules and Regulations 

1See generally 86 FR 8327. 

2Commenters such as the Chamber of Commerce 

and Seyfarth Shaw on behalf of the Coalition for 

Workforce Innovation also asserted that the 

Department’s fundamental basis for a delay—that 

the Independent Contractor Rule would create a 

new standard for determining who is an employee 

under the FLSA versus an independent contractor, 

and that this significant change merits further 

consideration—is incorrect. They note that the 

Independent Contractor Rule sets forth an economic 

realities test, which courts have used for decades. 

Although these commenters are correct that courts 

and the Department have previously applied an 

economic realities test for this purpose, the 

substance of the test in the January 2021 Rule—for 

example, giving two factors greater weight in the 

analysis and nearly dispositive weight if they both 

point toward the same classification—is different in 

a number of significant ways from the existing 

analysis. 

3Some commenters opposed to the proposed 

delay, including the U.S. Chamber of Commerce 

FLSA’s purpose, recognized repeatedly 

by the Supreme Court, to broadly cover 

workers as employees; the costs and 

benefits attributed to the January 2021 

Rule, including the assertion that 

workers as a whole will benefit from the 

January 2021 Rule; and/or whether the 

January 2021 Rule’s explanation of the 

standard provides clarity for 

stakeholders and for the purposes of 

enforcement, as was intended.1

In the NPRM, the Department 

explained that it believed a 60-day delay 

would not be disruptive. The 

Department noted that the Independent 

Contractor Rule is not yet effective, and 

the Department has not implemented 

the Independent Contractor Rule. The 

Department further explained that its 

public guidance, including the 

longstanding Fact Sheet #13, titled 

‘‘Employment Relationship Under the 

Fair Labor Standards Act (FLSA),’’ 

https://www.dol.gov/agencies/whd/factsheets/13-flsa-employment-relationship, 

does not contain the Independent 

Contractor Rule’s new standard for 

determining whether a worker is an 

employee or independent contractor 

and will continue to be publicly 

available. Moreover, the Department 

explained that federal courts across the 

country have developed and applied 

legal analyses for determining employee 

and independent contractor status 

under the FLSA. Therefore, employers 

and workers are already familiar with 

the legal standard that the Department 

and courts will apply when determining 

a worker’s employment status under the 

FLSA during any delay of the January 

2021 Rule’s effective date. 

The Department sought comment on 

its proposal to delay the effective date 

of the Independent Contractor Rule. The 

period for providing comment expired 

on February 24, 2021. 

II. Comments and Decision 

The Department received 1,512 

comments in response to the NPRM. 

Many workers and representatives of 

workers supported delaying the 

effective date of the Independent 

Contractor Rule, stating that the delay 

would allow the Department to further 

consider whether the Independent 

Contractor Rule was inconsistent with 

the intent of the FLSA, as well as 

relevant case law, and evaluate the 

extent to which the Independent 

Contractor Rule may not have fully 

considered additional costs to workers. 

For example, numerous commenters, 

including A Better Balance, the 

American Federation of State, County 

and Municipal Employees, the Center 

for Law and Social Policy, The 

Leadership Conference on Civil and 

Human Rights, the National 

Employment Law Project, NETWORK 

Lobby for Catholic Social Justice, the 

Service Employees International Union 

(SEIU), the Shriver Center on Poverty 

Law, and the United Brotherhood of 

Carpenters & Joiners of America, asked 

the Department to delay the January 

2021 Rule to consider, among other 

issues, the January 2021 Rule’s 

deviation from statutory text and 

relevant case law as well as the January 

2021 Rule’s impact on workers. Many of 

these comments noted that the January 

2021 Rule will have a $3.3 billion cost 

to workers each year, and will cause the 

most harm to workers of color in lowpaying jobs in industries, such as 

janitorial services, home care, and 

agriculture, in which independent 

contractor misclassification is common. 

The Attorneys General of New York, 

Pennsylvania, California, Colorado, 

Connecticut, Delaware, District of 

Columbia, Hawaii, Illinois, Maine, 

Maryland, Massachusetts, Michigan, 

Minnesota, New Jersey, New Mexico, 

North Carolina, Oregon, Rhode Island, 

Vermont, Virginia, and Washington also 

submitted a comment supporting the 

proposed delay, asserting that the 

January 2021 Rule would impose costs 

on states and does not increase clarity 

regarding the standard for determining 

who is an employee and who is an 

independent contractor. The 

Department agrees with these 

commenters that allowing more time for 

consideration of the January 2021 Rule 

is reasonable given the significant and 

complex issues the January 2021 Rule 

raises, including whether the January 

2021 Rule is consistent with the 

statutory intent to broadly cover 

workers as employees as well as the 

costs and benefits of the rule, including 

its effect on workers. Moreover, 

allowing the Independent Contractor 

Rule to go into effect while the 

Department undertakes a further review 

of the Independent Contractor Rule 

could lead to confusion and uncertainty 

among workers and businesses in the 

event that the Department proposes 

changes to the Independent Contractor 

Rule following its review. 

Numerous businesses, trade 

associations, individuals who identified 

themselves as freelancers or 

independent contractors, and their 

representatives opposed the NPRM 

because they believe the new standard 

created in the Independent Contractor 

Rule will provide clarity, and they 

would like it to take effect on its original 

effective date. For example, the 

American Council of Life Insurers, the 

Center for Workplace Compliance, the 

Coalition to Promote Independent 

Entrepreneurs, the National Association 

of Home Builders, the Harbor Trucking 

Association and Association of Bi-State 

Motor Carriers, and the Washington 

Legal Foundation took this stance; many 

of these commenters asserted that the 

Department fully considered the January 

2021 Rule during the initial rulemaking 

process, and others stated that they had 

undertaken preparations in anticipation 

of the January 2021 Rule going into 

effect.2 The Department also received 

hundreds of nearly identical comments 

from individuals who identified 

themselves as ‘‘a financial professional, 

small business owner and an 

independent contractor’’ affiliated with 

LPL Financial, who expressed a desire 

to be able to continue to choose to be 

independent contractors. The 

Department has considered the 

comments opposing the delay of the 

effective date of the January 2021 Rule, 

but does not agree with them. The 

maintenance of the current state of the 

law would not be disruptive to current 

business practices, so the regulated 

community would not be significantly 

affected by the continuation of the 

longstanding status quo for 60 

additional days. In addition, individuals 

who are currently independent 

contractors will not be affected by a 

delay of the Independent Contractor 

Rule, because they are already not 

employees under the FLSA. Although 

the Department understands that some 

commenters favor the January 2021 Rule 

and may have chosen to prepare to 

make adjustments to their operations in 

anticipation of it, the Department does 

not believe that the delay is significant 

enough to overcome its interest in 

carefully considering the January 2021 

Rule pursuant to the Regulatory Freeze 

Memorandum and OMB Memorandum 

M–21–14.3


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Federal Register / Vol. 86, No. 41 / Thursday, March 4, 2021 / Rules and Regulations 12537 

and Seyfarth Shaw on behalf of the Coalition for 

Workforce Innovation, argued that the Department 

had not based its reasons for proposing a delay on 

those enumerated in OMB Memorandum M–21–14. 

But the issues the Department indicated it would 

consider if allowed additional time, including the 

FLSA’s purpose, the costs and benefits of the rule, 

and the clarity the rule does or does not provide, 

are among the types of issues referenced in the 

memorandum. See OMB Memorandum M–21–14 

(directing agencies to consider in deciding whether 

delay of a rule’s effective date is appropriate, among 

other things, whether ‘‘the rule reflected proper 

consideration of all relevant facts,’’ ‘‘the rule 

reflected due consideration of the agency’s statutory 

or other legal obligations,’’ ‘‘the rule is based on a 

reasonable judgment about the legally relevant 

policy considerations,’’ and ‘‘objections to the rule 

were adequately considered’’). 

Some commenters raised procedural 

objections to the Department’s proposed 

delay. The Associated Builders and 

Contractors, the Financial Services 

Institute, and Littler Mendelson, P.C.’s 

Workplace Policy Institute asserted that 

the 19-day comment period for this 

rulemaking was insufficient, and 

critiqued the Department’s statement in 

the NPRM that ‘‘WHD will consider 

only comments about its proposal to 

delay the rule’s effective date.’’ 86 FR 

8327. The Department believes that the 

19-day comment period did provide a 

meaningful opportunity to comment on 

the proposed delay. The Department 

received over 1,500 comments in 

response to the NPRM proposing to 

delay the January 2021 Rule’s effective 

date, comparable to the approximately 

1,800 comments it received in response 

to the substantive notice of proposed 

rulemaking that it published in 

September 2020. See 85 FR 60600. 

Moreover, given the Independent 

Contractor Rule’s original March 8, 2021 

effective date, it would have been 

impracticable to afford a longer 

comment period. Had the Department 

allowed for a longer comment period, 

the Independent Contractor Rule would 

have taken effect before the delay could 

begin, which would have defeated the 

purpose of this rule and caused 

additional confusion for regulated 

entities. As to the issue of the scope of 

comments sought in this rulemaking, 

the Department sought comments about, 

and considered whether, issues of 

policy, law, and fact warrant an 

extension of the Independent Contractor 

Rule’s original effective date by 60 days. 

If after having had additional time to 

consider the January 2021 Rule, the 

Department decides to propose any 

changes to the January 2021 Rule, it will 

at that point solicit comments on its 

substantive proposal. 

Other commenters, including Littler 

Mendelson, P.C. and the National 

Federation of Independent Business, 

asserted that any delay to the 

Independent Contractor Rule’s March 8, 

2021 effective date must be published at 

least 30 days before such a delay takes 

effect. The Department disagrees. 

Section 553(d) of the Administrative 

Procedure Act provides that substantive 

rules should take effect not less than 30 

days after the date they are published in 

the Federal Register unless ‘‘otherwise 

provided by the agency for good cause 

found.’’ 5 U.S.C. 553(d)(3). Even if this 

provision were to apply, the Department 

finds that it would have good cause to 

make this rule effective immediately 

upon publication. Like allowing for a 

longer comment period, allowing for a 

30-day delay between publication and 

the effective date of this rulemaking 

would result in the January 2021 Rule 

taking effect before the delay begins, 

which would undermine this rule’s 

fundamental purpose of delaying the 

effective date before the Independent 

Contractor Rule takes effect in accord 

with the Regulatory Freeze 

Memorandum and result in additional 

confusion for regulated entities. The 

Regulatory Freeze Memorandum was 

issued on January 20, 2021, only 47 

days before the rule’s original effective 

date of March 8, 2021. It would not have 

been practicable to issue an NPRM 

proposing to delay the Independent 

Contractor Rule and allow for ample 

time for public comment on that 

proposal in time to publish a final rule 

not less than 30 days before March 8. 

Moreover, this rulemaking merely 

implements a 60-day delay of the 

Independent Contractor Rule, rather 

than itself imposing any new 

compliance obligations on the regulated 

community. Therefore, the Department 

finds that a lapse between publication 

and the effective date of this rule 

delaying the Independent Contractor 

Rule’s effective date is unnecessary. 

Because allowing for a 30-day period 

between publication and the effective 

date of this rulemaking is both 

unnecessary and impracticable, there is 

good cause to make this final rule 

delaying the Independent Contractor 

Rule’s effective date effective 

immediately upon publication. 

After reviewing timely comments 

submitted, the Department has decided 

to delay the Independent Contractor 

Rule’s effective date from March 8, 

2021, to May 7, 2021, as proposed. This 

delay will allow the Department 

additional time to review the multiple 

issues of law, policy, and fact that 

warrant additional review and 

consideration in accordance with the 

Regulatory Freeze Memorandum before 

the Independent Contractor Rule goes 

into effect. 

Signed this 2nd day of March, 2021. 

Jessica Looman, 

Principal Deputy Administrator, Wage and 

Hour Division. 

[FR Doc. 2021–04608 Filed 3–2–21; 4:15 pm] 

BILLING CODE 4510–27–P 

DEPARTMENT OF THE TREASURY 

Office of the Secretary of the Treasury 

31 CFR Parts 16, 27, and 50 

Inflation Adjustment of Civil Monetary 

Penalties 

AGENCY: Departmental Offices Treasury. 

ACTION: Final rule; direct final rule. 

SUMMARY: The Department of the 

Treasury (‘‘Department’’ or ‘‘Treasury’’) 

publishes this final rule to adjust its 

civil monetary penalties (‘‘CMPs’’) for 

inflation as mandated by the Federal 

Civil Penalties Inflation Adjustment Act 

of 1990, as amended by the Federal 

Civil Penalties Inflation Adjustment Act 

Improvements Act of 2015 (collectively 

referred to herein as ‘‘the Act’’). The 

Department also publishes this direct 

final rule to implement the inflation 

adjustment for the civil monetary 

penalties that may be assessed under 31 

CFR part 16 and updates the inflation 

adjustments through 2021. 

DATES: Effective dates: The final rule 

amendments to 31 CFR part 27 and 31 

CFR part 50 are effective March 4, 2021. 

The direct final rule amendments to 

31 CFR part 16 are effective May 3, 

2021. 

Comments due: Written comments are 

due on or before April 5, 2021. If the 

Department receives substantive adverse 

comment, we will publish a timely 

withdrawal in the Federal Register 

informing the public that this direct 

final rule will not take effect. 

ADDRESSES: You may submit comments 

on the amendments to 31 CFR part 16 

by any of the following methods: 

—Federal eRulemaking Portal: http:// 

www.regulations.gov. 

—Mail: Richard Dodson, Senior 

Counsel, General Law, Ethics, and 

Regulation, Department of the Treasury, 

1500 Pennsylvania Avenue NW, 

Washington, DC 20220. 

The www.regulations.gov site will 

accept comments until 11:59 p.m. 

Eastern Time on the comment due date. 

Received comments, including 

attachments and other supporting 

materials, are part of the public record 

and subject to public disclosure. Do not 

enclose any information in your 

comments or supporting materials that 

you consider confidential or 


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