DOL Publishes Final Independent Contractor Rule (US)

Way back in October 2022, we discussed the U.S. Department of Labor's (DOL) issuance of a notice of new rule that would substantially change the test for whether a worker is an employee, and thus covered by the minimum wage and overtime provisions of the Fair Labor Standards Act (FLSA), or is an independent contractor, and therefore not covered by those FLSA provisions. After an extensive notice-and-comment period, on January 10, 2024, the DOL published the final rule.

As expected, the final rule rescinds the employer-friendly "core factors"¹ standard announced by the DOL during the waning days of the Trump Administration in favor of a more complex and stringent "totality of the circumstances"² standard, under which no one factor is assigned any predetermined weight. The new standard broadens the scope of the analysis by requiring employers to apply a highly fact-specific multifactor standard but does not guide employers on how to balance or weigh the factors. As a