Earlier this month, the Department of Labor released a new final rule replacing the prior test for determining whether a worker is an employee (entitled to overtime and other benefits) or an independent contractor under the Fair Labor Standards Act.
The new DOL rule restores the six-factor “economic realities” test used during the Obama administration, which generally makes it harder to classify a worker as an independent contractor by focusing on the degree to which the worker is economically dependent on the “employer.” This replaces the two-factor test adopted by the DOL during the Trump administration, which focused principally on two factors–the employer’s degree of control over the work and the worker’s opportunity for profit and loss.
