The U.S. Department of Labor (DOL) has finalized a rule that determines whether a worker is an employee or an independent contractor under the Fair Labor Standards Act (FLSA). The new rule will go into effect March 11, 2024. It rescinds regulations issued during the Trump Administration and adopts a controversial six-part economic reality test applied during the Obama Administration. Although the final rule tweaks DOL’s original proposal, it still is likely to make it harder for an employer to show that a worker is an independent contractor. The determination is important because an employer that misclassifies a worker could face substantial financial liability.
Members of the Center for Workplace Compliance (CWC), our affiliated nonprofit membership association, can read more here.