Human Resources News & Insights

DOL’s got another surprise for you: New guidance on ICs

While firms anxiously await the DOL’s new FLSA overtime rules, the agency just announced it will be releasing new information on another key wage-and-hour issue this summer.  

At a recent labor and employment law conference, Dr. David Weil, an administrator with the DOL’s Wage-and-Hour Division, said the agency will release new guidance on independent contractors (ICs).

Clarify criteria

Weil said the agency would clarify the criteria that must be met to properly classify a worker as an IC.

Plus, Weil said he’d “be issuing an administrator interpretation specifically about our [the DOL’s] view of what is a legitimate independent contractor.”

Some employment attorneys have speculated that the feds could include the IC guidance with its revisions to the overtime regs.

That means employers may get hit with a barrage of critical FLSA info all at once. And sifting through that info could pose an administrative nightmare for HR and benefits pros.

Compliance check

While the OT change will no doubt force many firms to make some changes, the contractor clarification isn’t likely to be any great departure from the current guidance.

If you rely on ICs, you may want to review the classifications before the DOL clarification comes out.

To ensure compliance, the agency offers a six factor “economic realities test” that includes the factors the Supreme Court considers significant in determining whether an individual is economically dependent on an employer.

In addition, the following two questions can help determine if an individual is economically dependent on your company:

  • Can we require the person to work?
  • Can we prevent someone from working?
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