FLSA Independent Contractor Final Rule Released

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.