DOL Proposes New Regulations for Determining Independent Contractor Status under FLSA
1 min read
Sep 29, 2020
Last week, the Department of Labor (DOL) proposed new regulations designed to make it easier for companies to determine whether workers can be classified as independent contractors. The DOL proposed an "economic reality" test to determine whether a worker is an employee or independent contractor under the Fair Labor Standards Act (FLSA).
The test considers whether a worker is in business for themselves (independent contractor) or is economically dependent on a putative employer for work (employee). The DOL set forth two "core factors" to be considered in making this determination:
- the nature and degree of the worker's control over the work; and
- the worker's opportunity for profit or loss based on initiative and/or investment.
After these "core factors" are considered, three additional factors would serve as "guideposts." Those factors include:
- the amount of skill required for the work;
- the degree of permanence of the working relationship between the worker and the potential employer; and
- whether the work is part of an integrated unit of production.
The DOL's proposed regulations are similar to those set forth in last year's Wage and Hour Division guidance letter, which concluded that workers for a unnamed gig economy platform were independent contractors rather than employees. The proposed regulations are the DOL's first formal regulations on this topic under the Trump Administration. According to the DOL, the proposed regulations are meant to bring clarity and consistency to the determination of which workers are independent contractors under the FLSA. The DOL is seeking comments on the proposed regulations until October 26, 2020.
Topics
Related Capabilities
Featured Insights

Press Release
Sep 18, 2026
Paris Glazer Named to Chicago Daily Law Bulletin’s 2026 40 Attorneys Under Forty

Consumer Crossroads: Where Financial Services and Litigation Intersect
Sep 17, 2026
Federal and State Regulators Continue Crackdown on Junk Fees

Press Release
Sep 17, 2026
Defense Verdict Reduces $134 Million Demand to $2 Million in Catastrophic Motorcycle Injury Case

Insights for Insurers Alert
Sep 16, 2026
America 250: The Nation’s Unique Contributions to Insurance Coverage Law and Litigation

In The News
Sep 15, 2026
Lucy Wang Discusses the California Insurance Commissioner’s Role in Protecting Consumers

Press Release
Sep 10, 2026
Hinshaw Attorneys Recognized as 2027 Lexology Index Thought Leaders: USA

In The News
Sep 10, 2026
Nicholas Ajello and Gregory Emry Analyze FAA’s Proposed BVLOS Drone Regulations

Consumer Crossroads: Where Financial Services and Litigation Intersect
Sep 9, 2026
“Play Now, Arbitrate Later”—“Not So Fast,” Ninth Circuit Says

In The News
Sep 9, 2026
Jennifer Driscoll Discusses “Patchwork” of Laws Targeting Personalized Pricing

Employment Law Observer
Sep 8, 2026
Five Workplace Issues Every Employer Should Address Before They Become a Costly Lawsuit

Press Release
Sep 8, 2026
Jim Sandy Appointed Chair of ABA Debt Collection and Bankruptcy Subcommittee

