U.S. Department of Labor Clarifies Independent Contractor Status Under the FLSA
The U.S. Department of Labor (DOL) recently published a final rule on its interpretation of the Fair Labor Standards Act’s (FLSA) classification that determines whether a worker is an employee or an independent contractor.
According to the DOL, there are no significant changes from the independent contractor rule proposed in September 2020. That rule adopted an “economic reality test” that studies two core factors: “the nature and degree of workers’ control over their work and the opportunity for profit or loss based on initiative, investment or both.”
The test will assess three additional factors as well:
- The amount of skill required for the work.
- The degree of permanence of the working relationship between the worker and the potential employer.
- Whether the work is part of an integrated unit of production.
For more information about the FLSA’s ruling on independent contractors, what it means for your business, and its chances of surviving President Biden’s administration, contact us today.