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DOL Announces Final Rule Relaxing Independent Contractor Test | Baker Donelson


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On January 6, 2021, the Department of Labor (DOL) announced a final rule clarifying the standard for classifying a worker as an independent contractor under the Fair Labor Standards Act (FLSA). This final rule adopts the economic reality test focusing primarily on control over work and the opportunity for profit or loss. The effective date of the final rule is March 8, 2021 and makes it easier for employers to classify workers as independent contractors under the FLSA.
Under the economic realities test adopted by the DOL, an individual is an employee if he or she is dependent on an employer for work and is an independent contractor if he or she is, as a matter of economic reality, in business for him- or herself. The final rule explains that there are two core factors that are most important to this inquiry and carry the greatest weight: ....

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