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“Labor Department Dramatically Changes Interpretation of Independent Contractor Classification”

State Bar of Wisconsin, Inside Track By Michael Aldana and Sean M. Scullen

Below is an excerpt:

On the heels of its highly anticipated proposed revisions to the "white collar" overtime exemptions in the Fair Labor Standards Act (FLSA), the Department of Labor (DOL) recently issued an Administrative Interpretation (AI) that addresses the issue of independent contractors and their status as "employees" under the FLSA.

In its guidance, the DOL noted its position that “most workers are employees under the FLSA” and that independent contractor classification is overused and improper in most cases. While an AI does not have the force of law, it is a strong indication of the DOL’s enforcement position and could limit employers' ability to use the independent contractor classification moving forward depending on the amount of deference given to the guidance by the courts.


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