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ARTICLE · 19 APRIL 2024

DOL Finalizes Rule Tightening Independent Contractor Test

On Jan. 9, the U.S. Department of Labor (DOL) issued its final rule, "Employee or Independent Contractor Classification under the Fair Labor Standards Act." 29 CR 780, 788, 795.

United StatesEmployment and HR

On Jan. 9, the U.S. Department of Labor (DOL) issued its final rule, "Employee or Independent Contractor Classification under the Fair Labor Standards Act." 29 CR 780, 788, 795.

The rule takes effect on March 11 and replaces the 2021 Independent Contractor Rule which the DOL believed ignored case law and the DOL's position on independent contractor status. The new rule does not have any effect on other state or federal laws that have different standards for classifying independent contractors. It only applies to the Fair Labor Standards Act (FLSA).

Under the new rule, an individual is not an independent contractor if they are, as a matter of economic reality, economically dependent on an employer for work. The final rule applies six factors to analyze employee or independent contractor status under the FLSA:

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