Fair Labor Standards and independent contractors
The U.S. Department of Labor has announced a final rule clarifying the standard for employee versus independent contractor status under the Fair Labor Standards Act.
Sharpening the test to determine who is an independent contractor under the FLSA makes it easier to identify employees covered by the Act, while recognizing and respecting the entrepreneurial spirit of workers who choose to pursue the freedoms associated with being an independent contractor. The final rule reaffirms an “economic reality” test to determine whether an individual is in business for him or herself as an independent contractor or is economically dependent on a potential employer for work.
The core factors question whether a worker is economically dependent on someone else’s business or is in business for themselves.
The rule will take effect 60 days after publication in the Federal Register, on March 8th.