DOL Issues Additional Independent Contractor Guidance
The US Department of Labor (USDOL) Wage and Hour Division recently issued Administrator’s Interpretation No. 2015-1 which provides additional guidance regarding independent contractors under the Fair Labor Standards Act. The Department of Labor has been working for years with the IRS and state agencies to curtail misclassification of employees as independent contractors.
Despite these efforts to educate employers on correctly classifying workers as employees or independent contractors, the USDOL states, “Misclassification of employees as independent contractors is found in an increasing number of workplaces in the United States.” Therefore the Administrator believes additional guidance “may be helpful to the regulated community in classifying workers and ultimately in curtailing misclassification.”
The USDOL believes that the Fair Labor Standards Act definition of employ, “to suffer or permit to work”, as well as the “economic test” is broader in scope than the often-used “common law control” test, so the Department issued Interpretation No. 2015-1 to provide additional guidance.
The Interpretation includes additional insights regarding the “suffer or permit” standard as well multiple other factors to consider. A copy of the Interpretation can be obtained here: http://www.dol.gov/whd/workers/Misclassification/AI-2015_1.htm.