DOL Withdraws Trump-Era Independent Contractor Rule, May 13, 2021

Effective May 6, the DOL announced that it is withdrawing the most recent modifications to the independent contractor test. The Trump-era rule was designed to make it easier for employers to classify workers as independent contractors, rather than traditional employees. The new test prioritized two key factors, (1) the worker's degree of control over the work performed, and (2) the worker’s opportunity for profit or loss. This latest announcement stated that prioritizing these factors for determining employment status under the FLSA would have undermined the longstanding balancing approach of the economic realities test and court decisions. The Trump DOL rule would have also resulted in many workers losing FLSA protections. For more information on worker classification issues, see Q 8723.