Outside Publication

Department of Labor Issues Aggressive Interpretation of Independent Contractor Classification

ACC Focus on the Greater Philadelphia/Delaware Valley Chapter

September 2015

The US Department of Labor’s (DOL’s) July 15 Administrative Interpretation of the Fair Labor Standards Act (FLSA) purports to eliminate independent contractor status for most workers.

The new Interpretation concludes that “most workers are employees.” This position flows out of the unclear definition of the word “employ” as meaning “to suffer or permit to work.” Citing decisions issued long ago in a very different, manual labor–dominated economy, the DOL goes on to explain that the multi-factored “economic realities test” for employee/contractor status that it and several courts created “was specifically designed to ensure as broad of a scope of statutory coverage as possible.” The Interpretation pushes the envelope on each of the six factors of the test, interpreting them in a way that steers the factors in favor of employee status.

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