Department of Labor Proposes Rule to Clarify Independent Contractor Status

The U.S. Department of Labor recently announced a proposed rule clarifying the definition of “employee” under the Fair Labor Standards Act (FLSA) as it relates to independent contractors.

For eons, it was noticeably clear what an “employee” was. If you have a boss, you are an employee. If you can get fired, you are an employee. The gig economy has grayed the line between independent contractor and in-house staffer. Many successful U.S. corporations hinge their every customer interaction based upon this gray area. Hail a cab lately? I know — you try to avoid the extra dry-cleaning bill!

So, its time our big brother south of The Mason Dixon line tells us which side of this line we are on. Note, if you are reading this south of the 39th parallel, enjoy the weather. In a recent press release, the U.S. Department of Labor proposal aims “to bring clarity and consistency to the determination of who is an independent contractor under the Fair Labor Standards Act,” said Secretary of Labor Eugene Scalia.

The Department believes that streamlining and clarifying the test to identify independent contractors will reduce worker misclassification, reduce litigation, increase efficiency, and increase job satisfaction and flexibility. Efficient government — how quaint a notion.

Until the fog clears, the dust settles and swamp dries (could not resist!), reach out to your partners at Shield Advisory Group for a consultation for clarifications and updates concerning the latest and greatest in employee protocols. You cannot possibly be abreast on all new regulations. That’s why you have Shield Advisory Group to support your business.

Published by: Luigi Rosabianca of Shield Advisory Group