DOL Issues NPRM Revising Guidance Determining Worker Classification Under FLSA

---

The U.S. Department of Labor, Wage and Hour Division (WHD) published a Notice of Proposed Rule Making (NPRM) revising their guidance and addressing the distinction between an independent contractor and an employee under the Fair Labor Standards Act (FLSA). The proposed guidance seeks to improve the determination process for classifying workers to avoid employee misclassification.

The NPRM rescinds the prior rule, issued in January 2021, and replaces it with an analysis for determining employee or independent contractor status that is more consistent with judicial precedent and the FLSA’s purpose. The proposed changes mean no longer using “core factors” in determining worker classification but instead returning to conducting a “totality-of-the-circumstances” analysis in which the economic reality factors are each given full consideration and not assigned predetermined weight.

A worker’s classification as an employee or an independent contractor makes a considerable difference regarding their rights under the FSLA. Therefore, the WHD believes the new rule would protect worker rights and provide consistency for regulated entities.

Parties interested in submitting comments to this NPRM should do so by the December 13^th deadline. More details regarding this NPRM as well as details for submitting comments can be found at Federalregister.gov and https://www.dol.gov/agencies/whd/flsa/misclassification/rulemaking.