On October 13, 2022, the Department of Labor (DOL) announced a proposed rule addressing how to determine whether a worker is an employee under the Fair Labor Standards Act (FLSA) or an independent contractor.
The proposed rule would:
- Align the DOL’s approach with previous court interpretations and application of the economic reality test
- Restore 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
- Return to the longstanding interpretation of the economic reality factors which include:
- Investment factor
- Control factor
- Profit or loss factor
- Integral factor
- Rescind the 2021 Independent Contractor Rule
The Notice of Proposed Rulemaking, including text of new regulations, is available on the DOL website. The public can submit comments on this proposal until November 28, 2022.
For more information on the topic, check out the DOL press release.
Erin Kolecki is a compensation and HR consultant at TASB HR Services. Send Erin an email at firstname.lastname@example.org.
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