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ARTICLE · 28 OCTOBER 2020

DOL Proposes New Rule Clarifying Independent Contractor Status

Troutman Pepper Locke LLP
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The U.S. Department of Labor issued a proposed rule, making it easier for workers to be classified as independent contractors under the Fair Labor Standards Act.

United StatesEmployment and HR
Leigh McMonigle
Leigh McMonigle
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Q: What do I need to know about the proposed federal rule on independent contractor classification?

A: The U.S. Department of Labor (DOL) issued a proposed rule, making it easier for workers to be classified as independent contractors under the Fair Labor Standards Act (FLSA).

When evaluating independent contractor classifications under the FLSA, courts traditionally have applied the "economic realities" test, which relies on balancing seven factors. However, this has resulted in inconsistent court rulings and confusion among companies and individuals. The DOL's proposed rule adopts a modified version of this test, focusing on certain factors, while clarifying others.

The Proposed Rule

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