DOL Unveils Final Independent Contractor Rule

On Jan. 9, 2024, the U.S. Department of Labor (DOL) released a long-awaited final rule concerning when employers can classify workers as independent contractors under federal law. This is the final version of the Employee or Independent Contractor Classification Under the Fair Labor Standards Act (FLSA), which DOL proposed in October 2022 (the "Final Rule"). It establishes a six-factor test for determining whether a worker is an employee or an independent contractor. The Final Rule was published in the Federal Register Jan. 10, 2024, and takes effect March 11, 2024.

The Final Rule rescinds the prior Independent Contractor Status Under the Fair Labor Standards Act rule (2021 IC Rule), which DOL published Jan. 7, 2021 (see GT Alert), and replaces it with an analysis for determining employee/independent contractor status that the DOL states is more consistent with longstanding judicial interpretations. The 2021 IC Rule focused on "core factors." DOL explained in its