Earlier this morning, the U.S. Department of Labor released its Notice of Proposed Rulemaking (NPRM) with respect to Employee or Independent Contractor Classification Under the Fair Labor Standards Act. The proposal is expected to be published in the Federal Register on October 13, and the Department will accept comments for 45 days thereafter. As anticipated, the NPRM once again proposes to repeal the Department’s prior regulation on the same subject issued under the Trump administration (an earlier attempt at repeal was held improper by a federal district court) and replace it with a regulation it claims is more aligned with judicial precedent. While settling for a multi-factor economic realities test that looks at the totality of the circumstances, the NPRM suggests the factors will be interpreted in a manner that will make demonstrating independent contractor status more difficult.

The NPRM jettisons the Trump regulation’s emphasis on two core factors – nature and degree of control over the work and the worker’s opportunity for profit or loss – and proposes to weigh all six of its proposed factors more equally. The NPRM also eliminates the Trump regulation’s emphasis on actual practice in favor of also weighing theoretical possibility.  And in a break from the weight of judicial precedent, the NPRM explains that all instances of control should be considered, even if deriving from contractual requirements, quality control or safety standards, or legal obligations.

Scopelitis attorneys are still analyzing the lengthy NPRM and will have a more detailed summary available.

If you are interested in the summary, please contact Greg Feary, and for more information, please contact Greg Feary, Shannon Cohen, David Robinson, Jeff Jackson, Allie Boyd, Braden Core, Jack Finklea, Jim Hanson, Kelli Block, or Prasad Sharma.