Final Rule on Classifying Workers as Employees or Independent Contractors
January 26, 2024
The U.S. Department of Labor announced a final rule to help employers and workers better understand when a worker qualifies as an employee and when they may be considered an independent contractor under the Fair Labor Standards Act.
The rule aims to combat the problem of employee misclassification by providing guidance on proper classification.
The rule focuses on six factors that guide the analysis of a worker’s relationship with an employer
- The opportunity for profit or loss a worker might have,
- The financial stake and nature of any resources a worker has invested in the work,
- The degree of permanence of the work relationship,
- The degree of control an employer has over the person’s work,
- Whether the work the person does is essential to the employer’s business, and
- A factor regarding the worker’s skill and initiative.
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