October Tip of the Month: DOL Proposes New Rule on Independent Contractor Status
On October 13, 2022, the U.S. Department of Labor (DOL) proposed a new rule that would revise the DOL's guidance on how to determine whether a worker is an employee or an independent contractor under the Fair Labor Standards Act (FLSA). Under the proposed rule, a worker would be classified as an employee if the worker is economically dependent upon an employer for work. Six factors will be considered in making this determination: (1) the worker's opportunity for profit or loss depending upon their managerial skill, such as the worker's ability to accept or decline jobs and negotiate rates for those jobs; (2) investments made by the worker and the employer; (3) the degree of permanence of the work relationship; (4) the nature and degree of control that the employer exercises over the worker; (5) the extent to which the work performed by the worker is an integral part of the employer's business; and (6) whether the worker uses specialized skills in performing the work. These factors will be considered together, and no factor is necessarily more determinative than the other. The DOL will comment on the rule through November 28, 2022, after which the rule could be enacted. In the meantime, the ongoing attention to employee/contractor classification issues—and their substantial implications—is an important reminder to employers to carefully assess and possibly revisit their classification decisions.
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Before proceeding, please note: If you are not a current client of Perkins Coie, please do not include any information in this e-mail that you or someone else considers to be of a confidential or secret nature. Perkins Coie has no duty to keep confidential any of the information you provide. Neither the transmission nor receipt of your information is considered a request for legal advice, securing or retaining a lawyer. An attorney-client relationship with Perkins Coie or any lawyer at Perkins Coie is not established until and unless Perkins Coie agrees to such a relationship as memorialized in a separate writing.