LABOR DEPARTMENT UNVEILS FINAL INDEPENDENT CONTRACTOR RULE
February 16, 2024
On January 9, 2024, the U.S. Department of Labor (“DOL”) released further information regarding its final rule addressing when employers can classify workers as independent contractors under federal labor law. The final version of the rule is set to take effect March 11, 2024, under the Fair Labor Standards Act and, among other things, “establishes a six-factor test for determining whether a worker is an employee or independent contractor.” The six factor-test is non-exhaustive and considers: 1) Opportunity for profit or loss depending on managerial skill; 2) Investments by the worker and the potential employer; 3) Degree of permanence of the work relationship; 4) Degree of permanence of the work relationship; 5) Extent to which the work performed is an integral part of the business and; 6) Skill and initiative. The rule is set to replace a narrower test proposed by the previous administration which never went into effect.
All businesses who utilize independent contractors in the U.S. should review these factors as they may warrant employer-employee obligations. Please contact us if you have any questions regarding independent contractors qualifying as employees under the final rule.
If you have any questions, please contact Evelyn Sahr at 202.659.6622 or esahr@eckertseamans.com; Drew Derco at 202-659-6665 or dderco@eckertseamans.com; Jay Julien at 202.659.6648 or jjulien@eckertseamans.com, or any other attorney at Eckert Seamans with whom you have been working.
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