It’s been a bumpy road for the federal rules on independent contractor status under the Fair Labor Standards Act.

In the courts, the test has always focused on the “economic reality” of the relationship between a worker and the entity that benefits from the services provided to determine whether the worker is an employee or an independent contractor. The primary factors considered, which derive from the Supreme Court’s 1947 decision in United States v. Silk, are (1) the degree of control exercised by the employer over the worker, (2) the worker’s opportunity for profit or loss and their investment in the business, (3) the degree of skill and independent initiative required to perform the work, (4) the permanence or duration of the working relationship, and (5) the extent to which the work is an integral part of the employer’s business. Courts ordinarily focus on the “the totality of the circumstances” to analyze what some have called “the ultimate concern [of] whether, as a matter of economic reality, the workers depend upon someone else’s business for the opportunity to render service or are in business for themselves.”

Historically, the U.S. Department of Labor’s guidance has generally tracked the judicial test for employee status. During the Obama administration, the DOL focused on six factors to consider when determining whether an employment relationship exists, and ramped up its enforcement efforts to combat misclassification. The agency framed the relevant factors...

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