DOL Proposes New Standard for Classifying Workers

The DOL has once again proposed changing the standard for determining whether a worker is an employee or independent contractor--reverting largely to the standard developed in 2021 under the first Trump administration. The proposal would allow employers to rely upon two key factors when evaluating a worker's status: (1) the nature and degree of control over the work that's being performed and (2) the worker's opportunity for profit or loss. Three additional factors would be relevant but would carry less weight than these two core issues, including: the amount of skill required to complete the work, the permanence of the parties' working relationship and whether the work is a part of an integrated unit of production. The 2021 standard applied only for purposes of wage and hour claims under the Fair Labor Standards Act (FLSA). The proposed rule would continue to apply for FLSA purposes, but would also dictate whether the worker has leave rights under the Family and Medical Leave Act (FMLA) or is entitled to protections under the federal Migrant and Seasonal Agricultural Worker Protection Act. For more information on the worker classification standard, visit Tax Facts Online. Read More: Link to Q8723. Note: Q is updated.