The Wage and Hour Division (WHD) of the Department of Labor (DOL) today issued another broadside against employer misuse of the independent contractor job status to avoid the responsibilities of labeling and treating a worker as an employee.
WHD administrator David Weil issued an interpretation titled “The Application of the Fair Labor Standards Act’s ‘Suffer or Permit’ Standard in the Identification of Employees Who Are Misclassified as Independent Contract,” in which he broached the longstanding independent contractor litmus test based on “economic realities.”
He observed: “In order to make the determination whether a worker is an employee or an independent contractor under the FLSA, courts use the multi-factorial ‘economic realities’ test, which focuses on whether the worker is economically dependent on the employer or in business for him[self] or herself.”
Weil further explained:
In applying the economic realities factors, courts have described independent contractors as those workers with economic independence who are operating a business of their own. On the other hand, workers who are economically dependent on the employer, regardless of skill level, are employees covered by the FLSA.
And he concluded, “In sum, most workers are employees under the FLSA’s broad definitions.”