O’Connor and Atmore Outline New DOL Rule that Defines ‘Independent Contractor’ and Offers Greater Protection to Workers

In a new article for Bloomberg Law, employment law attorneys Karen O’Connor and Emily Atmore discuss a rule published recently by the Department of Labor that, for the first time, defines “independent contractor” under the Fair Labor Standards Act.

Scheduled to take effect March 11, the new rule replaces a 2021 Trump-era proposed rule that was used for informal guidance for classifying workers. It marks a return to prior judicial precedent and DOL interpretive guidance, offering workers an approach that, based on certain factors, including the degree to which they rely on an employer financially, should provide them with greater protection on the job.

The rule codifies a six-factor “economic realities” test that weighs the strength of the relationship between an employer and employee and will, according to the authors, make it more difficult for a worker to be classified as an independent contractor and thus denied the benefits and protections arising from the employment relationship.

“[W]e expect to see many service workers such as hair stylists, nail salon technicians, and makeup artists, and laborers such as landscapers, gardeners, and painters to be reclassified as employees. Whether gig economy workers such as delivery and transportation drivers are also subject to reclassification is less clear.”

O’Connor and Atmore conclude: “Employers have just 60 days to determine if their workers are properly classified as employees or independent contractors under the Fair Labor Standards Act, which triggers coverage under federal wage-and-hour law. The new rule inevitably will be cited as a persuasive—though not controlling—authority for federal courts considering classification issues.”

Read the full article here.