USDOL Issues Regulation That Qualifies More Workers for Minimum Wage and Overtime Pay
Effective March 11, 2024, a new regulation published by the U.S. Department of Labor (USDOL) makes it easier to classify workers as employees and more difficult to classify them as independent contractors. That is significant, because employees are entitled to minimum wage and overtime pay, unless they qualify as “exempt.”
The regulation revises previous guidance, which was in place since January 7, 2021, for determining (or “classifying”) who is an employee or independent contractor under federal wage and hour law, namely the Fair Labor Standards Act (FLSA). Previous guidance narrowed the definition of employee and expanded the definition of independent contractor -- neither of which is defined by the FLSA itself. Now, under the new regulation, the USDOL has restored the traditional “economic reality” test as the standard for classifying workers, while the prior guidance had modified the test and emphasized certain factors over others.
Additional Resources
Published on January 10, 2024, the new regulation regarding “Employee or Independent Contractor Classification Under the Fair Labor Standards Act” is linked here .
The USDOL’s Frequently Asked Questions (FAQ) page regarding the new regulation is linked here.
Questions
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