DOL Issues Proposed Rule to Revise Independent Contractor Classification

On October 13, the U.S. Department of Labor (DOL) published a notice of proposed rulemaking to revise DOL’s guidance for distinguishing employees from independent contractors under the Fair Labor Standards Act (FLSA).

The proposed rule would rescind an earlier rule, published in January 2021, which shifted the analysis of whether an individual is an employee or independent contractor from a totality of the circumstances test to a five determining factors test. The reason for the recission is the Department’s determination that the 2021 rule does not fully comport with the FLSA’s text and purpose as interpreted by courts and departs from decades of case law.

The proposed rule does not change the current interpretation of FLSA’s application to shared living and similar programs. ANCOR will continue to analyze the proposed rule and provide updates.