Ted Hollis, Chris Nickels and Tyler Roth Author Indiana Lawyer Article About DOL Final Rule to Determine if Workers are Employees or Independent Contractors
Ted Hollis, Chris Nickels and Tyler Roth, all Quarles & Brady Labor & Employment attorneys, wrote an article for The Indiana Lawyer regarding the U.S. Department of Labor’s Final Rule and how it determines whether a worker is an employee or independent contractor under the Fair Labor Standards Act.
The FLSA statute does not provide a specific standard for distinguishing whether a worker is an employee or independent contractor. Over time, the courts developed a common law independent contractor test, which was intended to examine the “economic realities” that exist between the worker and entity receiving the worker’s services.
The Final Rule will likely face legal challenges, which it will need to withstand in order to remain in force. Still, with the effective date of the DOL’s new independent contractor test set for March 11, businesses that utilize independent contractors will want to review the status of those workers under the Final Rule’s revised standard. If workers are misclassified as independent contractors, employers face potential liability for back pay, unpaid taxes and other penalties.