Contributing Research by Dori Kojima
On July 15, 2015, the U.S. Department of Labor (DOL) released an Administrator’s Interpretation addressing how to determine whether a worker is an independent contractor or employee under the Fair Labor Standards Act (FLSA). The FLSA is the primary federal law regulating minimum wage and overtime pay. The Interpretation puts employers on notice that the DOL is increasing efforts to curtail the misclassification of workers.
The “Economic Realities” Test Under the FLSA
To determine whether a worker is an employee or independent contractor under the FLSA, courts apply the “economic realities” test. The test focuses on whether the worker is economically dependent on the company or in business for himself or herself. The “economic realities” test has six factors: