Administration Finalizes Independent Contractor Regulations

Administration Finalizes Independent Contractor Regulations

January 7 the DOL’s Wage and Hour Division published a final version of its independent contractor (IC) rule under the Fair Labor Standards Act. The regulation reaffirms the “economic reality” test when determining whether a worker is an independent contractor or an employee. The final rule identifies and explains two “core factors” in determining status, “the nature and degree” of control over the work and “the worker’s opportunity for profit or loss” based on initiative and/or investment. The effective date of the rule is March 8, 2021, which will be well into President-elect Biden’s term.

The rule is eligible for rescission (cancellation) under the Congressional Review Act (CRA). If Congress does not act, the Biden administration will likely delay the regulation before repealing it altogether and advancing its own independent contractor proposal.

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