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Department of Labor Issues Final Rule for Identifying Independent Contractors in an Employer’s Workforce

Following up on its proposed rule issued in September 2020, on Jan. 6, 2021, the Department of Labor (DOL) issued its final rule on worker classification. The final rule, effective March 8, 2021 (60 days from publication in the Federal Register), changes little from the DOL’s proposed rule but adopts a five-part test that purportedly clarifies, as opposed to alters, the federal landscape with respect to classification of workers as independent contractors not subject to Fair Labor Standards Act’s minimum wage and overtime protections. The final rule runs counter to the current state-level trend of adopting and/or entertaining the enactment of laws and/or regulations that discourage the use of independent contractors.

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