{"id":14282,"date":"2015-07-15T22:15:16","date_gmt":"2015-07-15T22:15:16","guid":{"rendered":"https:\/\/www.bfvlaw.com\/?post_type=news&p=14282"},"modified":"2022-08-08T19:34:57","modified_gmt":"2022-08-08T19:34:57","slug":"important-update-to-dol-standards-for-determining-independent-contractors","status":"publish","type":"news","link":"https:\/\/www.bfvlaw.com\/news\/important-update-to-dol-standards-for-determining-independent-contractors\/","title":{"rendered":"Important Update to DOL Standards for Determining Independent Contractors"},"content":{"rendered":"
\n

Issued 7-15-15<\/p>\n

\n

Today, the Department of Labor clarified the standards it uses to determine if a worker is an employee or an independent contractor under the Fair Labor Standards Act (\u201cFLSA\u201d). In short, it emphasized that \u201cmost workers are employees under the FLSA,\u201d even when classified as independent contractors, partners or members of external LLCs in their contracts.<\/p>\n

The DOL uses a test it calls the \u201cEconomic Realities Factors\u201d to determine if the worker is an employee or operating an independent business. The test is designed to determine if the worker is \u201ceconomically dependent\u201d on the employer, under the theory that true independent contractors are not economically dependent on any single employer the way an employee is. These factors include:
\n#1<\/strong>\u00a0Is the work performed by the Worker an integral part of the Employer\u2019s business?<\/p>\n

#2<\/strong>\u00a0Does the Worker\u2019s business-managerial skill or initiative affect the Worker\u2019s opportunity for profit or loss?<\/p>\n

#3\u00a0<\/strong>How does the Worker\u2019s relative investment in the business compare to the Employer\u2019s?<\/p>\n

#4<\/strong>\u00a0Does the work require special skill and initiative?<\/p>\n

#5<\/strong>\u00a0Is the relationship between the Worker and the Employer permanent or indefinite?<\/p>\n

#6\u00a0<\/strong>What is the nature and degree of the Employer\u2019s control?<\/p>\n

No single factor is entirely determinative and all factors should be considered together to determine if a worker is economically dependent on the employer or in business for him or herself.<\/p>\n

The use of independent contractors has been closely scrutinized by the DOL for the past several years. The issuance of the Interpretation should be viewed by employers as a strong warning that the DOL will continue to be vigilant in challenging independent contractor status. Therefore, if you use independent contractors or are planning to use independent contractors, we encourage you to review the Interpretation and seek guidance to clarify any questions you may have about proper classification of your workers.<\/p>\n

As always, let us know if we can help or if you have any questions.<\/p>\n

Sincerely,<\/p>\n<\/div>\n

\n
\n
Ken Winkler
\n<\/a>Shareholder, Berman Fink Van Horn P.C.<\/div>\n<\/div>\n<\/div>\n<\/header>\n","protected":false},"featured_media":0,"template":"","acf":[],"yoast_head":"\nImportant Update to DOL Standards for Determining Independent Contractors - Berman Fink Van Horn P.C.<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.bfvlaw.com\/news\/important-update-to-dol-standards-for-determining-independent-contractors\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Important Update to DOL Standards for Determining Independent Contractors - Berman Fink Van Horn P.C.\" \/>\n<meta property=\"og:description\" content=\"Issued 7-15-15 Today, the Department of Labor clarified the standards it uses to determine if a worker is an employee or an independent contractor under the Fair Labor Standards Act (\u201cFLSA\u201d). 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