On January 10, 2024, the U.S. Department of Labor published a final rule, effective March 11, 2024, revising the Department’s guidance on how to analyze who is an employee or independent contractor under the Fair Labor Standards Act (FLSA). This final rule rescinds the Independent Contractor Status Under the Fair Labor Standards Act rule (2021 IC Rule), that was published on January 7, 2021 and replaces it with an analysis for determining employee or independent contractor status that is more consistent with the FLSA as interpreted by longstanding judicial precedent.
The misclassification of employees as independent contractors may deny workers minimum wage, overtime pay, and other protections. This final rule will reduce the risk that employees are misclassified as independent contractors while providing a consistent approach for businesses that engage with individuals who are in business for themselves.
Additional Information
- Final Rule: Employee or Independent Contractor Classification Under the Fair Labor Standards Act – Federal register notice
- Frequently Asked Questions – General and substantive questions about the final rule
- Small Entity Compliance Guide – A guide to assist small businesses to comply with the final rule, including an overview of the rule, the six factors of the economic reality test, common questions, and additional resources
- Press Release – Announcing the final rule
- Proposed Rule: Employee or Independent Contractor Classification Under the Fair Labor Standards Act: Notice of proposed rulemaking that was issued in advance of the final rule
- 2024 FLSA Worker Classification Rule—Information for Potential Freelancers