Thursday, May 6, 2021
Unsurprisingly, on May 5, 2021, the U.S. Department of Labor (DOL) withdrew its Independent Contractor Final Rule, published in the last days of the previous administration.
The Final Rule, which never took effect, would have established a uniform standard for determining a worker’s status as an “independent contractor” under the Fair Labor Standards Act (FLSA). In a foreshadowing of the Final Rule’s withdrawal, earlier this year the DOL withdrew two related Opinion Letters as being prematurely issued.
Background
The FLSA guarantees a minimum wage for all hours worked and overtime for any hours worked over 40 per week for all covered, non-exempt employees. As the U.S. Supreme Court first noted more than 70 years ago, individuals who perform services for a company as an independent contractor are not afforded the FLSA’s minimum wage and overtime protections because they are not “employees.” The FLSA, however, says little about how to distinguish an employee from an independent contractor.