On October 11, 2022, the Department of Labor (“DOL”) unveiled a proposed rule to define the test for independent contractor status under federal wage and hour law. The proposed rule is the latest in a series of back-and-forth political maneuverings and seeks to replace a proposed Trump administration regulation that sought to classify workers as independent contractors if they own their own businesses or have the ability to work for competing companies (the “Contractor Rule”). The DOL’s new proposal mirrors guidance from the Obama administration that the Trump administration had sought to withdraw and replace with a more business-friendly test.
Under the Fair Labor Standards Act (“FLSA”),workers are generally classified as employees or independent contractors. Employers are required to comply with the FLSA’s minimum wage, overtime, and recordkeeping requirements for employees, but not for independent contractors. Should the new test become a reality, it could impact millions of gig and contract workers including those in the rideshare, healthcare, and restaurant industries.
The proposed rule would be a return to a “totality-of-the-circumstances” test that considers such factors as 1) the opportunity for profit or loss depending on managerial skill; 2) investments by the worker and the employer; 3) degree of permanence of the work relationship; 4) nature and degree of control; 5) extent to which the work performed is an integral part of the employer’s business; and 6) skill...
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https://www.natlawreview.com/article/dol-s-proposed-independent-contractor-ru...