Department Of Labor Issues Final Rule On Independent Contractor Classification

On January 10, 2024, the U.S. Department of Labor (DOL) published a final rule, Employee or Independent Contractor Classification Under the Fair Labor Standards Act, effective March 11, 2024, that revamps the legal standard the DOL will apply when evaluating the classification of workers as employees or independent contractors under the Fair Labor Standards Act (FLSA). The final rule articulates a multifactor economic reality test that looks at the "totality of the circumstances" to determine whether a worker is economically dependent on an employer for work, and thus properly classified as an "employee" subject to the minimum wage, overtime and other requirements of the FLSA, or in business for themselves, and thus classified as an "independent contractor" not subject to the FLSA's requirements. This final rule rescinds the more streamlined and employer-friendly standard set forth in the 2021 Independent Contractor Rule that was issued in the final days of the Trump