The U.S. Department of Labor (DOL) announced the final rule addressing how to determine whether a worker is an employee under the Fair Labor Standards Act (FLSA) or an independent contractor.
The final rule, effective March 11, 2024:
- Aligns the DOL’s approach with previous court interpretations and application of the economic reality test
- Restores the multifactor analysis to determine whether a worker is an employee or an independent contractor, ensuring all factors are analyzed without predetermined weight for any one factor
- Describes six factors to be considered, including:
- Degree to which employer controls how the work is done
- Worker’s opportunity for profit or loss factor
- Skill and initiative required
- Degree of permanence of the working relationship
- Worker’s investment in equipment or materials
- Extent to which service rendered is an integral part of the employer’s business
Detailed information, including the final rule text and FAQ, is available on the DOL website.
April Mabry oversees HR Services training services, member library products, and the HRX newsletter. She has provided HR training and guidance to Texas public schools since 1991. Mabry was a classroom teacher for 11 years in Texas and Michigan.
Mabry has a bachelor’s degree in education from the University of Michigan and certification as a professional in human resources (PHR) and is a SHRM-CP.
Subscribe to HRX
Stay up to date with all the latest HR news and trends by joining the HRX mailing list!