DOL Publishes Final Rule On Independent Contractor Classification

Summary

The U.S. Department of Labor (DOL) issued its final rule addressing when a worker will be an independent contractor, rather than an employee, under the Fair Labor Standards Act (FLSA). The final rule largely mirrors the proposed rule in reducing the existing "economic reality" test to two core factors—the nature and degree of the worker's control over the work and the worker's opportunity for profit or loss. Three other factors—amount of skill required, degree of permanence, and whether the work is part of the company's production process—play lesser roles. The rule is scheduled to take effect March 8, 2021. But given the upcoming change of Presidential administration, the rule's prospects are uncertain.