DOL Issues Much-Anticipated Final Rule Addressing Independent Contractor Status Under the FLSA
January 07, 2021
The U.S. Department of Labor (DOL) has released its much-anticipated Final Rule addressing independent contractor status under the Fair Labor Standards Act (FLSA). The Final Rule is effective March 8, 2021. The “ultimate inquiry” is whether an individual is “economically dependent” on another for work. To evaluate economic dependence, one examines the “economic reality” of the situation. Economic reality, in turn, depends on several factors. Two of those factors, deemed “core” factors, carry significantly weight in the analysis than the other factors. Those two core factors are: “the nature and degree of control over the work”; and “the individual’s opportunity for profit or loss.” In addition to these core factors, three additional factors also influence the economic reality analysis: “the amount of skill required for the work”; “the degree of permanence of the working relationship between the individual and the potential employer”; and “whether the work is part of an integrated unit of production.”
