EMPLOYMENT LAW UPDATE – From Ellen Leibovitch, Head of Labor & Employment, Assouline & Berlowe – Nearly three (3) years ago, the Department of Labor (DOL) advised as to its plan to revise the rules on determining when workers could be properly classified as independent contractors. Effective March 11, 2024, the final rule will officially be published and the 2021 proposed rule rescinded.
The final rule retains the same factors from the proposed rule, but employers are now required to use a “totality of the circumstances” analysis where no single factor or group of factors carries greater weight than any other factor. This final rule differs from the 2021 proposed rule under which two factors – the employer’s control over the work and the worker’s opportunity for profit or loss – carried greater weight over the other factors.
The six factors to be considered in classifying a worker as an independent contractor under the final rule are the following:
1. The degree to which the hiring entity controls how the work is done.
2. The worker’s opportunity for profit or loss.
3. The amount of skill and initiative required for the work.
4. The degree of permanence of the working relationship.
5. The worker’s investment in equipment or materials required for the task.
6. The extent to which the service rendered is an integral part of the hiring entity’s business.
The DOL believes this final rule will reduce the possibility of employees being misclassified as independent contractors. The DOL also aims to offer increased guidance for businesses that engage individuals who are in business for themselves. A detailed compliance guide from the DOL can be found at the following link:
https://lnkd.in/en9bYnZM
For more information contact Ellen M. Leibovitch at 561-361-6566 or by email at eml@assoulineberlowe.com
Assouline & Berlowe, P.A. Blog 