The U.S. Department of Labor (“DOL”) has announced a final rule officially withdrawing a proposed independent contractor rule that would have made it easier to classify workers as independent contractors under the Fair Labor Standards Act (“FLSA”). 

As we previously reported, the Trump administration proposed an independent contractor rule at the very end of his term. The “economic realities test” focused on whether, as a matter of economic reality, the worker is dependent upon the company for work or instead in business for him or herself. That rule was to go into effect on March 8, 2021 but the DOL under the Biden administration delayed the effective date.

The DOL has now officially withdrawn the Trump-era rule and has not proposed a new independent contractor rule. As a result, the independent contractor test remains based on a review of the totality of the circumstances, including the degree of control exercised over the worker’s tasks. The current DOL is expected to issue its own interpretation of how it believes courts should define employee under the FLSA.

We will continue to monitor developments in this area and will keep you apprised of same.  Should you have any questions, please contact ALG.