The Wage and Hour Division of the U.S. Department of Labor
(“DOL”) recently published a proposed rule (the
“Proposed Rule”) that would modify DOL's
regulations for determining whether a worker is an employee or an
independent contractor under the Fair Labor Standards Act
(“FLSA”), which, among other things, requires payment
of minimum wages and overtime to covered employees.
The Proposed Rule would rescind a prior rule published in
January 2021 (the “2021 Rule”) and replace it with a
multi-factor “totality of the circumstances” analysis
aimed at determining whether the worker is economically dependent
on an employer or is in business for themself. Each of the six
“economic reality” factors under the Proposed Rule
would be given equal weight. That is a departure from the 2021
Rule, which placed greater weight on two “core
factors,” i.e., the nature and degree of
control over the work and the worker's opportunity for profit
or loss. DOL's commentary accompanying the
