DOL Withdraws Independent Contractor Rule

You may recall that in January 2021 the U.S. Department of Labor released a new standard for determining whether a worker is an independent contractor under the Fair Labor Standards Act (FLSA). However, that employer-friendly rule was frozen by President Biden upon his inauguration.

The DOL has now announced that the rule will be withdrawn because it “was in tension with the FLSA’s text and purpose,” “would have undermined the longstanding balancing approach of the economic realities test,” and “would have narrowed the facts and considerations comprising the analysis of whether a worker is an employee or an independent contractor, resulting in workers losing FLSA protections.”

It appears that the DOL will return to the economic realities test to determine whether an individual is an employee or an independent contractor. If you have questions about this analysis, please contact a KZA attorney. 

KZA Employer Report articles are for general information only; they are not intended and should not be construed to be legal advice. Reading or replying to such articles does not establish an attorney-client relationship. In addition, because the subject matters and applicable laws discussed in Employer Report articles are often in a state of change and not always applicable to every type of business entity or organization, readers should consult with counsel before making decisions based on the same.