The U.S. Department of Labor posted a notice of proposed rulemaking for Employee or Independent Contractor Classification Under the FLSA; the DOL is accepting comments on this notice through Nov. 28, 2022.
FCA International is working with its legislative and legal teams to ensure signatory contractors’ interests are heard and understood throughout this proposed rulemaking process. We will keep you updated on the issue as it progresses.
Contractors who want to submit individual comments to the DOL can do so online or send their comments by mail to “Division of Regulations, Legislation, and Interpretation, Wage and Hour Division, U.S. Department of Labor, Room S-3502, 200 Constitution Avenue NW, Washington, D.C. 20210.
The Proposed Rule
The Department of Labor issued the proposed rule to provide guidance on classifying workers and to combat employee misclassification. The DOL said the rule proposes a framework more consistent with longstanding judicial precedent on, which employers have relied on to classify workers as employees or independent contractors under the Fair Labor Standards Act (FLSA).
Per the DOL, the proposed rule would do the following:
- Align the department’s approach with courts’ FLSA interpretation and economic reality test.
- Restore the multifactor, totality-of-the-circumstances analysis to determine whether a worker is an employee or an independent contractor under the FLSA.
- Ensure that all factors are analyzed without assigning a predetermined weight to a particular set of factors.
- Revert to the longstanding interpretation of the economic reality factors. These factors include the investment, control and opportunity for profit or loss factors. The integral factor, which considers whether the work is integral to the employer’s business, is also included.
- Assist with the proper classification of employees and independent contractors under the FLSA.
- Rescind the 2021 Independent Contractor Rule.