DOL Proposes a Roll Back of Trump-Era FLSA Independent Contractor Rule
October 21, 2022
Publications
Last week, the U.S. Department of Labor introduced a proposed rule to update its test for determining whether a worker is an employee under the Fair Labor Standards Act (the “FLSA”). If implemented, the proposed rule would likely make it more difficult for employers to classify workers as independent contractors.
The proposed new test would rescind the independent contractor test that was adopted by the DOL in the waning hours of the Trump Administration. That test emphasized two core factors for determining whether a worker was an independent contractor: a worker’s control over their work, and the worker’s opportunity for profit and loss.
Under the new proposed rule, the DOL would return to a “totality of the circumstances” analysis to evaluate the economic realities of the relationship between a worker and a company. For many employers, that rule is about as clear as mud. Explaining the rationale for its new proposed rule, the DOL stressed that independent contractors are those workers who are not economically dependent on their employer for work and are in business for themselves.
