Employee vs. Independent Contractor Under the Fair Labor Standards Act

On January 9, 2024, the U.S. Department of Labor published a final rule defining the term “independent contractor” under the Fair Labor Standards Act (FLSA).  This rule, which takes effect March 11, 2024, includes six non-exhaustive factors, with no one factor being dispositive and the weight to be given to each factor depending on the facts and circumstances of the particular case:  

1. the worker's opportunity for profit or loss; 
2. investments by the worker and the potential employer; 
3. the degree of permanence of the work relationship; 
4. the nature and degree of control the potential employer has over the individual’s work; 
5. the extent to which the work performed is an integral part of the potential employer’s business; and 
6. the worker’s skill and initiative.   

Since these factors are not exhaustive, other factors may be relevant in determining whether the worker is an employee or independent contractor for purposes of the FLSA.