Independent Contractor Rule Changes

The U.S. Department of Labor released its final rule on January 9, 2024, regarding the test for determining when a worker is an employee or an independent contractor. While the rule will likely be challenged in the courts, employers should still familiarize themselves with the new standard.

How Have the Rules for Classifying Independent Contractors Changed?

Under the Trump Administration, the test for whether a worker should be classified as an employee or independent contractor focused on two core factors: (1) the nature and degree of the worker's control over the work; and (2) the worker's opportunity for profit or loss.

The new rule instead uses a totality of circumstances test, which requires employers to consider six factors of equal weight to determine whether a worker is an employee or an independent contractor. The six factors are: