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U.S. Department of Labor Proposes New Rule on Independent Contractor Status

The U.S. Department of Labor (DOL) proposed a new rule that aims to change how employers assess whether a worker is an employee or an independent contractor under the Fair Labor Standards Act (FLSA). If adopted, the rule will use a multi-factor economic realities test to determine whether a worker is truly in business for themselves.

How Is This Rule Different?If adopted, the proposed rule would rescind a 2021 rule that placed increased importance on two factors when assessing a worker’s status: control over the work and opportunity for profit or loss. The proposed rule would return the DOL to a traditional six-factor test, which is historically more employee-friendly. The question of whether a worker is an employee or an independent contractor would rest on whether, as a matter of economic reality, the worker is “economically dependent on the employer for work or in business for themselves.” Read more…