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ARTICLE · 14 FEBRUARY 2024

U.S. DOL Issues New Rule On Independent Contractor Classification, Returning To More Employee-Friendly Analysis

The U.S. Department of Labor (DOL) published a new rule (the "New Rule") on January 9, 2024, defining "independent contractor" under the Fair Labor Standards Act (FLSA).

United StatesEmployment and HR

The U.S. Department of Labor (DOL) published a new rule (the "New Rule") on January 9, 2024, defining "independent contractor" under the Fair Labor Standards Act (FLSA). Effective March 11, 2024, the rule returns to a six-factor test that asks whether, as a matter of economic reality, a worker is economically dependent on the employer or is in business as an independent contractor.

The distinction between employees and independent contractors determines whether the FLSA applies. The FLSA guarantees a minimum wage for all hours worked and overtime pay for any hours worked over 40 per week for all covered, non-exempt employees. On the other hand, individuals who perform services for a company as independent contractors are not afforded the FLSA's minimum wage and overtime protections.

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