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ARTICLE · 18 JANUARY 2024

DOL Issues Final FLSA Independent Contractor Rule, Returns To Six-Factor Economic Reality Test

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The U.S. Department of Labor published a final rule Jan. 9, 2024, on distinguishing employees from independent contractors for purposes of minimum wage...

United StatesEmployment and HR
Peter A. Milianti
Peter A. Milianti
David Leishman
David Leishman
Michael R. Phillips
Michael R. Phillips

The U.S. Department of Labor published a final rule Jan. 9, 2024, on distinguishing employees from independent contractors for purposes of minimum wage and overtime pay under the Fair Labor Standards Act (FLSA). The rule returns to a six-factor test that asks whether, as a matter of economic reality, a worker is economically dependent on the employer or is in business as an independent contractor.

The six factors are:

  1. Opportunity for profit or loss based on managerial skill.
  2. Investments by the worker and the potential employer.
  3. Degree of permanence of the relationship.
  4. Nature and degree of control.
  5. Extent to which the work performed is an integral part of the potential employer's business.

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