It’s game on for the independent contractor rule
Mid-March is an exciting time for college basketball; however, employers will quickly foul out of compliance if they’re not prepared for the U.S. Department of Labor’s final independent contractor rule to take effect on March 11.
Most U.S. employers must comply with the new rule by that date unless a court order blocks it from proceeding.
Where to start?
When hiring a worker, employers will need to use a multifactor, totality-of-the-circumstances analysis (i.e., look at the whole picture) to figure out if that person is an employee or an independent contractor under the federal Fair Labor Standards Act (FLSA).
In other words, the final rule allows all factors to be weighed equally. There isn’t a predetermined weight assigned to a particular factor or set of factors. The rule, instead, uses the longstanding interpretation of economic reality factors.
Employers should focus on these six key factors when classifying workers:
- Opportunity for profit or loss depending on managerial skill,
- Investments by the worker and the potential employer,
- Degree of permanence of the work relationship,
- Nature and degree of control,
- Extent to which the work performed is an integral part of the potential employer’s business, and
- Worker’s skill and initiative.
Conducting an audit
Although time is tight, concerned employers that hire people as independent contractors should consider doing an audit of how those relationships are determined and handled. Included in that audit process are these focus areas:
- Gather all agreements and review the terms on a case-by-case basis.
- Analyze pay structure.
- Review daily duties, including how independent contractors fit in the organizational structure.
- Interview managers who oversee these relationships for their input.
- Gauge how likely the company could face a misclassification claim and expose the company to risks, taking everything into account.
Key to remember: The deadline for employers to comply with the final independent contractor rule is looming. Employers must take steps now to ensure compliance by March 11.




















































