DOL Announces Final Independent Contractor Classification Rule

It's a traditional Democrats vs. Republican football: federal agencies under Democratic control want to make it harder to classify workers as independent contractors, and Republicans want to make it easier. Predictably, the standards for classifying individuals as independent contractors loosened during the Trump administration; and just as predictably, the Biden administration has now made it harder.

On January 9, 2024, the DOL announced the final rule on the independent contractor classification under the Fair Labor Standards Act "FLSA," effective March 11, 2024. Whether a worker is an independent contractor or an employee determines the applicability of minimum wage and overtime requirements, among other legal obligations under the FLSA. This distinction is crucial to companies' employment policies, business decisions, and potential liability. Against that backdrop, understanding the contours of this new final rule is essential for all employers.