The U.S. Department of Labor (DOL) has announced its intention to issue a new final rule regarding the employee-vs.-independent contractor analysis under the Fair Labor Standards Act (FLSA). That announcement came by way of a June 3, 2022, blog post from Jessica Looman, Acting Director of the DOL’s Wage and Hour Division. The current Independent Contractor (IC) Final Rule, issued during the previous administration and set to go into effect in March 2021, initially was delayed and then ultimately was withdrawn by the DOL in May 2021. However, in March 2022, a federal court in Texas held that the DOL’s delay and withdrawal was unlawful, and that the current Final Rule has been in effect since its original March 2021 date. The DOL recently appealed that ruling, and the appeal is pending in the U.S. Court of Appeals for the Fifth Circuit.
Over the years, both the courts and the DOL had developed similar, yet somewhat varying, standards for determining whether an individual is an employee or an independent contractor, most of which focused on the “economic reality” of the relationship between the employer and the individual. Those standards were derived from six, non-exclusive factors originally presented by the Supreme Court in two cases decided on the same day, United States v. Silk, 331 U.S. 704 (1947), and Rutherford Food Corp. v. McComb, 331 U.S. 722 (1947). The factors are:
The employer’s versus the individual’s degree of control over the work;
The individual’s...
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