Editor’s Note: Upon request by several industry groups including PPAI, the Department of Labor has extended the deadline for the public to submit comments. Originally slated to end November 28, it is now December 13.

PPAI and the promotional product industry are pushing back against a proposal by the Department of Labor to revise its guidance on identifying who is an employee or an independent contractor under the Fair Labor Standards Act (FLSA).

Announced earlier this month, the DoL is seeking public comment on new regulations that would make it challenging for independent contracts in the promo industry to retain their preferred classification.

An Industry At Risk

PPAI, working in collaboration with industry members in its Government Relations Advisory Council, has determined that if this rule is implemented, it will make it extremely difficult for thousands of entrepreneurs in the promotional products field to retain their status as independent contractors under FLSA.

“Our industry is being unfairly lumped into this proposed DoL rule, which seeks to do what Congress rightly refused to,” says Dawn Olds, MAS, PPAI Board Chair. “It is critical that members take action and make their voices heard. This is one of the most harmful issues we have faced, since it affects so many – multi-line reps and distributor independent contractors in particular.”

  • Multi-line reps are largely relied on by small and mid-size promotional products suppliers.
  • Roughly 4,200 industry suppliers meet the U.S. Small Business Administration’s definition of small businesses in manufacturing (nearly 98% of the industry’s suppliers).
  • These companies account for roughly $7.8 billion in annual revenue.

Unlike the Protecting the Right to Organize (PRO) Act which was introduced in Congress last year and would have modified the National Labor Relations Act, the newly proposed administrative rule changes the criteria for determining whether workers are employees or independent contractors under the FLSA.

  • The new test, which is comprised of six parts compared to the current test’s four parts, considers many of the same factors as previous standards, however the new test is more likely to result in a worker being classified as an employee under the FLSA.

A Call To Action

It is critical for members of this industry to contact the Department of Labor regarding this newly proposed rule change. If the rule is implemented as it is currently written, it could result in thousands of independent contractors in the promotional products industry having their livelihoods threatened.

PPAI has included some prepared comments to assist with companies’ outreach to the Department of Labor. They can be uploaded or copied into the Federal Register.

Industry members are encouraged to add their own specific examples that show evidence of independence to demonstrate to the DoL that this proposed rule would be detrimental to their ability to independently earn their income.