Analysis: New guidance clarifies the exceptional, limited nature of ‘independent contractor’ status. The federal Department of Labor has signaled its concern that workers are being unlawfully excluded from key protections on the job. On Wednesday, the agency’s wage-and-hour division released a 15-page document clarifying who should be considered an “independent contractor” versus an “employee.” It was widely read as addressing the gig-based “sharing economy” and sharp anxieties over labor, income inequality and the changing nature of work. Using concrete examples from nursing, construction, publishing and cleaning, the guidance clarifies that it’s the “economic realities” of one’s work that matter, “not the label an employer gives it” or what’s listed on a 1099 tax form for non-employees. The legal factors seem technical but are fairly commonsensical: Does the worker play a key role in the employer’s business? Is the work entrepreneurial? Does the employer control what she does?
Employee or Independent Contractor?
Source: David Weil, U.S. Department of Labor Blog, July 15, 2015
The Wage and Hour Division is tackling employee misclassification because so much depends upon the answer to that question.
The Application of the Fair Labor Standards Act’s “Suffer or Permit” Standard in the Identification of Employees Who Are Misclassified as Independent Contractors
Source: David Weil, U.S. Department of Labor, Wage and Hour Division, Administrator’s Interpretation No. 2015-1, July 15, 2015