On September 22, 2020, the Department of Labor (“DOL”) released a proposed rule providing a more employer-friendly interpretation of independent contractor status under the Fair Labor Standards Act.

The proposed rule provides a framework for classifying a worker as an independent contractor rather than an employee. Adopting a modified “economic reality” test, the proposed rule considers two core factors and three other “guideposts” to determine status. Under the two core factors, the DOL considers: (1) the nature and degree of the worker’s control over the work and (2) the worker’s opportunity for profit or loss based on personal initiative or investment. When the two core factors conflict, the three other factors serve as additional guideposts in the analysis, which assess: (3) the amount of skill required for the work, (4) the degree of permanence in the working relationship, and (5) whether the work is part of an integrated unit of production.