DOL Publishes Final Rule on Independent Contractor Classification Under the FLSA

New York employers must be mindful that the U.S. Department of Labor (DOL) published its final rule on when a worker should be classified as an employee as opposed to an independent contractor under the Fair Labor Standards Act (FLSA). The new rule, which takes effect on March 11, 2024, considers the following six factors in determining independent contractor status:

1. Opportunity for profit or loss depending on managerial skill
2. Investments by the worker and the potential employer
3. Degree of permanence of the work relationship
4. Nature and degree of control by the business entity
5. Extent to which the work performed is an integral part of the potential employer’s business
6. Skill and initiative

Employers should familiarize themselves with the new rule and examine those in their workforce classified as independent contractors accordingly. Businesses should also keep in mind that this final rule does not affect other federal, state, and local laws that use different or more stringent standards of analysis with respect to employee classification.

If you have any questions or require assistance in navigating these updates and enabling regulations and guidance, please do not hesitate to contact us.

For more details regarding this new legislation, read our Client Alert below.