On the U.S. Department of Labor’s Rule on How it Determines Independent Contractor or Employee Status under the Fair Labor Standards Act

Washington, DC – Following is a statement from Rebecca Dixon, president and CEO of the National Employment Law Project, on the U.S. Department of Labor’s rule explaining how it determines whether a worker is an independent contractor or employee under the Fair Labor Standards Act (FLSA). 

“NELP commends the U.S. Labor Department’s new rule, which reinforces the breadth of employee coverage under the Fair Labor Standards Act (FLSA). The rule will help ensure that only true independent contractors – individuals who run their own businesses – are excluded from the FLSA’s bedrock minimum wage and overtime protections. 

“This new rule helps to address corporate schemes to avoid accountability and depress wages by mislabeling workers as ‘independent contractors’ — often in take-it-or-leave-it contracts workers must accept as a condition of work. 

“Fake independent contractor schemes prey on the imbalance of power in many work relationships. This practice is strikingly racialized, occurring in low-paid, labor-intensive occupations in which Black and immigrant workers are overrepresented. These practices often rob janitors, home care workers, construction workers, truckers, and hotel workers of their right to minimum and overtime wages by stripping FLSA protections from the workers who most need them. 

“In replacing a previous rule that improperly narrowed the FLSA— today’s rule adopts the framework used by courts for decades, which asks the fundamental question: is the worker in business for themself. The rule’s factors apply flexibly to the many kinds of work relationships that exist today, including arrangements where a business does not directly control a worker or uses an agent or technology to manage or supervise its workers’ activities.  

“By interpreting FLSA coverage broadly, the rule targets employer abuse and is also consistent with Supreme Court precedent, which has recognized the ‘striking breadth’ and unique history of the FLSA’s definitions. 

“Today the U.S. Labor Department has taken a significant step forward in ensuring all people who work for someone else—regardless of who they are, where they work, or what they do—have access to our foundational minimum wage and overtime protections.”