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DOL Withdraws Independent-Contractor Rule

independent contrator

The U.S. Department of Labor (DOL) is officially withdrawing the prior administration’s independent-contractor rule, which would have made it easier for businesses to classify workers as independent contractors rather than employees.

“The department believes that the rule is inconsistent with the [Fair Labor Standards Act’s] FLSA’s text and purpose and would have a confusing and disruptive effect on workers and businesses alike due to its departure from longstanding judicial precedent,” according to the DOL’s announcement on May 5.

Under the FLSA, employees are entitled to minimum wage, overtime pay and other benefits. Independent contractors are not entitled to such benefits, but they generally have more flexibility to set their own schedules and work for multiple companies.

 

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