Advocacy in action blog

For decades, insurance and financial professionals have operated under an independent contractor model that allows advisors to serve clients with flexibility, objectivity, and independence. But according to NAIFA New Jersey, the state’s newly adopted worker classification rule does not provide sufficient protections to guarantee insurance and financial advisors can continue operating independently without risk of being reclassified as full-time employees. As a result, NAIFA New Jersey supports legislation introduced by Sen. Gordon M. Johnson that would exempt insurance and financial professionals from the rule and provide the clarity the industry believes is necessary.

The U.S. Department of Labor’s proposal to rescind current guidance determining independent contractor status under the Fair Labor Standards Act will significantly benefit independent insurance agents and brokers and the consumers who rely on them for financial and risk-protection products and services. The current guidance is far too likely to misclassify independent contractors in the insurance space as employees. NAIFA supports DOL’s proposal to replace the current guidance “with guidance that is substantially similar to the guidance DOL adopted in 2021,” NAIFA President Christopher Gandy wrote in a letter to Andrew Rogers, administrator of the DOL’s Wage and Hour Division.

On April 9, the Office of Advocacy at the U.S. Small Business Administration (SBA) convened a roundtable on the Department of Labor’s proposed Independent Contractor Rule, a proposal that would rescind and replace the 2024 rule that has created uncertainty for financial professionals and small businesses alike.