This week, the U.S. Department of Labor (DOL) proposed a new rule that would create a uniform approach to the way companies classify workers as independent contractors or employees under the Fair Labor Standards Act (FLSA). The notion of classifying workers as independent contractors versus employees has continued to gain importance in recent years, given the growing gig economy, which makes independent contractors central to the business models of many major companies.
The DOL’s newly proposed rule would greatly benefit companies, by making it easier to classify workers as independent contractors and thereby remove a company’s obligation to provide typical employee benefits and workplace protections, such as paid leave, overtime pay and other fringe benefits. This marks a large shift from the standard proposed under the Obama administration, which would have broadened the scope of employee status, but was ultimately nixed by the Trump administration in 2017.
Continue Reading U.S. Department of Labor proposes new “reality” for classifying independent contractors