LawFlash
The US Department of Labor published a Proposed Rule on October 13 seeking to return to applying a test that would make it more difficult for certain workers to qualify as independent contractors.
The Proposed Rule revises the standard for determining when a worker is an employee or an independent contractor under the Fair Labor Standards Act (FLSA). The Department of Labor (DOL) will accept written comments regarding the Proposed Rule for 45 days from its publication date—i.e., until November 27, 2022. The DOL will then review the comments before issuing a Final Rule which may modify the Proposed Rule. The proposed changes will not go into effect prior to the Final Rule being published. It is not clear when the Final Rule will be published, but it is unlikely to occur this year.
The Proposed Rule would scrap a Trump-era independent contractor rule and apply a totality-of-the-circumstances economic realities test. The test’s ultimate inquiry is whether, as a matter of economic reality, the worker is economically dependent on the employer (and thus an employee), or in business for themself (and thus an independent contractor) by reference to a non-exhaustive list of factors. The proposed test would make it more difficult for certain workers to qualify as independent contractors.
TRUMP-ERA RULE WOULD BE REPLACED
In January 2021, DOL published a rule (2021 Rule) identifying five economic reality factors to be considered when determining whether a worker is properly...
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