DOL Issues Proposed Rule Addressing Independent Contractor Status

On October 13, 2022, the Department of Labor (DOL) issued a notice of proposed rulemaking (Notice) that seeks to clarify the analysis for determining whether a worker is an employee or independent contractor. According to the DOL, the proposed rule is intended to be more consistent with legal precedent interpreting the Fair Labor Standards Act (FLSA).

The Notice proposes to replace the January 7, 2021, Independent Contractor Status Under the FLSA rule with a rule that seeks to reduce the risk that employees are misclassified as independent contractors, while attempting to provide added certainty for businesses that engage with individuals who are in business for themselves. The DOL states the new rule would preserve essential worker rights and provide consistency for regulated entities. The full text of the Notice as published in the Federal Register can be found here.