US Dept of Labor issues final rule on contractors
In a move that will evoke interest from UK contractors and employers, the US Department of Labor (DOL) has announced a final rule on whether a worker may be considered an independent contractor.
As reported today [9 January] by US HR website HR Dive, the DOL has announced a final rule revising its interpretation of the Fair Labor Standards Act’s classification provision. The final rule largely tracks the agency’s October 2022 proposed rule. It retains the multifactor, “totality-of-the-circumstances” framework for analysing independent contractors’ status included in that proposal.
Under this framework, DOL will consider six non-exhaustive factors when examining the relationship between a worker and a potential employer:
- Worker’s opportunity for profit or loss.
- Investments made by the worker and the employer.
- Degree of permanence of the work relationship.
- Nature and degree of control over performance of the work.
- Extent to which the work performed is an integral part of the employer’s business.
- Use of the worker’s skill and initiative.
HR Dive said that in a press call on Monday [8 January], acting labour secretary Julie Su said the final rule would ensure a level playing field for workers, particularly vulnerable workers.
The rule will be published in the Federal Register on Wednesday [10 January] and is due to take effect two months later, on 11 March, HR Dive quoted US officials as saying.
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