The U.S. Department of Labor (DOL) has officially published its newly proposed rule for classifying workers as Independent Contractors (IC) under the Fair Labor Standards Act (FLSA). The newly proposed rule reinstates a multifactor “totality of the circumstances” approach requiring the consideration of various factors – considered as part of the larger economic reality of the worker – in determining whether a worker qualifies as an IC.

The new rule emphasizes that no one factor, or subset of factors will be necessarily dispositive of the IC issue and that the factors listed are not to be considered an exhaustive list. Nonetheless, these factors as a matter of course, generally include the opportunity for profit or loss, investment, permanency, the degree of control by the employer over the worker, whether the work is an integral part of the employer’s business, and skill and initiative.

A seventh “additional factors” catch-all would allow for the consideration of any factor relevant in determining whether the worker is an employee or IC for purposes of the FLSA, if the factor(s) in some way indicate whether the worker is in business for themself, as opposed to being economically dependent on the employer for work.

Published on October 13, 2022, the public comment period will remain open for a period of 45 days. The DOL strongly recommends commenters submit their comments electronically via https://www.regulations.gov to ensure timely receipt prior to the close of the comment period, as the Department continues to experience delays in the receipt of mail.