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ARTICLE · 08 JANUARY 2021

DOL Simplifies Independent Contractor Analysis In Final Rule

Littler Mendelson
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On January 6, 2021, the U.S. Department of Labor (DOL) finalized its highly anticipated independent contractor rule.

United StatesEmployment and HR
Littler Mendelson, P.C.
Littler Mendelson, P.C.
James A. Paretti, Jr.
James A. Paretti, Jr.
Michael Lotito
Michael Lotito
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On January 6, 2021, the U.S. Department of Labor (DOL) finalized its highly anticipated independent contractor rule. The rule delivers on the DOL's promise to simplify, clarify and harmonize the factors for determining when a worker is an independent contractor versus an employee under the Fair Labor Standards Act (FLSA). It is meant to be the sole and authoritative interpretation for this analysis. Although the rule is slated to take effect March 8, 2021, the new administration is expected to review this along with other rules adopted during the last few months by the outgoing administration.1

Overview of the New Rule

After the DOL considered nearly 1,800 comments, the final rule largely tracks what the agency originally proposed, with a few significant clarifications. The rule focuses on the concept of economic dependence as the touchstone of the economic reality test.

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