A worker is entitled to minimum wage and overtime pay protections under the Fair Labor Standards Act (FLSA) when there is an employment relationship between the worker and an employer and there is coverage under the FLSA. Employers are responsible for determining whether a worker is an employee under the FLSA. Misclassification occurs when an employer treats a worker who is an employee under the FLSA as an independent contractor. Misclassifying employees as independent contractors is a serious problem because misclassified employees may not receive the minimum wage and overtime pay to which they are entitled under the FLSA or other benefits and protections to which they are entitled under the law.
As part of its efforts to address misclassification, the Wage and Hour Division on January 10, 2024 published a final rule, effective March 11, 2024, revising its guidance on how to analyze whether a worker is an employee or independent contractor under the FLSA. This guidance is available in the form of regulations at 29 CFR Part 795. Employers and workers may consult these regulations and the additional resources listed below to help analyze a worker’s status as an employee or independent contractor under the FLSA. The Wage and Hour Division’s final rule also rescinds the Independent Contractor Status Under the Fair Labor Standards Act rule (2021 IC Rule, 86 FR 1168) that was published on January 7, 2021.
Additional Resources
- Employee or Independent Contractor Classification Under the Fair Labor Standards Act
- Misclassification of Employees as Independent Contractors Under the Fair Labor Standards Act Presentation
- Fact Sheet 13: Employee or Independent Contractor Classification Under the Fair Labor Standards Act (FLSA)
- Frequently Asked Questions
- 2024 FLSA Worker Classification Rule—Information for Potential Freelancers
- Small Entity Compliance Guide