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On January 10, 2024, the United States Department of Labor (DOL) issue the “Final Rule.” The Final Rule is how the DOL will determine whether a worker is classified as an employee or an independent contractor under the Fair Labor Standards Act (FLSA). Below are the highlights of what you need to know.

When Does The Final Rule Take Effect?
The Final Rule takes effect on March 11, 2024.

What Factors Will The DOL Use To Determine Employee Or Independent Contractor Status?

1. The worker’s opportunity for profit or loss depending on managerial skill.
2. Investments made by the worker and the potential employer.
3. Degree of permanence of the work relationship.
4. Nature and degree of control the employer has over the work performed.
5. Extent to which the work performed is an integral part of the potential employer’s business.
6. The worker’s skill and initiative.

The Final Rule also clearly states that no single factor or group of factors will be conclusive of a worker’s status. Therefore, the DOL will consider other factors outside of the above six-factor test if it relates to the evaluation of a worker’s economic dependence on the employer.

What Is The Impact Of The Final Rule?

The Final Rule may create classification challenges for employers which can lead to a significant legal cost and liability. Employers may want to review the Final Rule carefully and update their classification policies and any independent contractor agreements. If you need help, contact Business Law Attorney Melody Cobbe, the owner of Cobbe Law. Melody has a wealth of experience to help you navigate the complexities of this Final Rule.