DOL Reviews Independent Contractor Rule

On June 3, 2022, the Department of Labor’s Wage and Hour Division announced that it is reviewing regulations addressing the distinction between an employee and an independent contractor under the Fair Labor Standards Act (FLSA). Independent contractors are not guaranteed the federal minimum wage and overtime pay that covered employees receive under the FLSA. DOL published a final rule on this issue on January 7, 2021. The rule adopted an economic reality test that considers whether a worker operates their own business or is economically dependent on an employer for work. DOL delayed that rule on March 4, 2021, and then withdrew it on May 6, 2021, but on March 14, 2022, a district court vacated DOL’s decision to delay and withdraw the rule, and the 2021 final rule remains in effect. DOL plans to engage in new rulemaking on this issue and seeks public feedback.