The independent contractor/employee classification conundrum is nothing new. Courts, state legislatures, and even the IRS have developed a slew of multi-factor tests to assess whether a worker is an employee or independent contractor. Mixed among these tests is arguably the most significant-the U.S. Department of Labor’s six-factor test, which is now being given a much-needed makeover. On September 22, 2020, the DOL released a Notice of Proposed Rulemaking, announcing an employer-friendly proposed rule that nixes a balancing test in favor of a test that focuses on the two factors that matter.
As the rule currently stands, the DOL has a six-factor test to assess the worker’s economic dependence on the business, including: (1) the business’s control over the workers; (2) the permanency of the relationship; (3)the workers’ investment in facilities and equipment; (4) the skill required to complete the work; (5) the opportunities for profit or loss; and (6) the extent to which the workers’ services are integrated into the business. No one factor is given more weight than any other.
Continue Reading It Takes Two: The DOL’s Proposed Rulemaking Regarding FLSA Worker Classification