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Dive Brief:
- The U.S. Department of Labor (DOL) will Thursday propose a rule revising its interpretation of the Fair Labor Standards Act’s classification provision to determine whether a worker is an employee or independent contractor. DOL said it often sees employers misclassify employees as contractors and that the rule is aimed at preserving those workers' rights to minimum wage and overtime.
- The proposal would return DOL’s independent contractor classification standard to a multi-factor “totality-of-the-circumstances analysis” framework, a shift from the Trump administration’s 2021 rule that established a test in which these factors were to be separated into a set of “core factors” and “non-core factors.”
- “After further consideration, the Department believes that the 2021 IC Rule does not fully comport with the FLSA’s text and purpose as interpreted by courts and departs from decades of case law applying the economic reality test,” DOL said, adding that it is proposing to rescind the 2021 test in favor of one “more consistent with existing judicial precedent and the Department’s longstanding guidance prior to the 2021 IC Rule.” DOL will accept comments from stakeholders for 45 days, once the proposal is published in the Federal Register.
Dive Insight:
This is a developing story.
