Source: RESPONSIBLE AG, 2/10/21
The U.S. Department of
Labor recently adopted a final rule simplifying the process for defining a
worker as an employee or an independent contractor under the Fair Labor
Standards Act (FLSA). The rule includes an “economic realities” test that
considers whether workers are in business for themselves (independent
contractor) or are instead economically dependent on an employer for work
(employee).The new rule explains two “core factors” for the determination: 1.
The nature and degree of control the worker exercises over the
work 2.
The worker’s opportunity for profit or loss based on initiative, investment or both It also identifies three other factors
for this analysis, particularly when the two core factors do not point to the
same kind of classification: 1.
The amount of skill required for the work 2.
The degree of permanence of the working relationship between the
worker and the potential employer 3.
Whether the work can be considered to be part of an integrated
unit of production
The final rule is scheduled to become effective on March 8th unless overturned
by Congress.
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