DOL Finalizes Regulation On Independent Contractor Classification

The Department of Labor (DOL) published its final rule putting forth a test to determine whether workers are independent contractors such that they are not entitled to the minimum wage or overtime pay that the Fair Labor Standards Act (FLSA) requires for employees. Published on January 6, 2021, the final Rule slightly modifies the initial version that it proposed in September 2020 (which was summarized here). 

The DOL's new test evaluates the "economic realities" of the working relationship between the worker and the employer. More specifically, the worker is an employee if, "as a matter of economic reality, the individual is economically dependent on that employer for work." The factors set forth are the same as the previously proposed rule. Namely, the two core factors remain (1) the nature and degree of the worker's control over the work, and (2) the worker's opportunity for profit or loss.