Determining Independent Contractor Status

HR Compliance
Recruiting & Hiring

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The Department of Labor published a revised rule for determining independent contractor status on January 10, 2024. This rule is anticipated to be effective on March 11, 2024. Although legal challenges to this rule are expected, employers should plan to comply with the rule on the effective date.

In January 2024, the Department of Labor (DOL) announced a revised test for determining independent contractor status under the Fair Labor Standards Act (FLSA). In 2021, the test was simplified to focus on several core factors, primarily the economic realities test; however, the 2024 revised test expanded the requirements to include six factors. These requirements must be met, along with the Internal Revenue Service (IRS) rules on determining independent contractor status, when a company considers the appropriate categorization of a worker. Employers must also check for and comply with applicable local laws on independent contractor status.

Independent Contractor Agreement