How to Apply the DOL's Independent Contractor Test
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Elizabeth Arnold and Samantha Stelman provide an overview of the Department of Labor’s final rule regarding independent contractors, which will take effect on March 11, 2024; and examples of how the rule’s factors may be applied and tested.
Under the rule, determining whether a worker is an employee or independent contractor involves evaluating six factors that focus on the “economic realities” of the relationship between the potential employer and the worker:
- Opportunity for profit or loss depending on managerial skill
- Investments by the worker and potential employer
- Degree of permanence of the work relationship
- Nature and degree of control
- Extent to which the work performed is an integral part of the potential employer’s business
- Skill and initiative
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