{"id":38,"date":"2015-07-23T18:15:07","date_gmt":"2015-07-23T18:15:07","guid":{"rendered":"http:\/\/marcusboxerman.com\/blog\/?p=38"},"modified":"2016-03-22T20:02:39","modified_gmt":"2016-03-22T20:02:39","slug":"employees-not-independent-contractors","status":"publish","type":"post","link":"https:\/\/marcusboxerman.com\/blog\/employees-not-independent-contractors\/","title":{"rendered":"U.S. Department of Labor: Most Workers are Employees, Not Independent Contractors"},"content":{"rendered":"

On July 15, 2015, Administrator David Weil, of the Wage and Hour Division of the U.S. Department of Labor (\u201cDOL\u201d), issued an Administrator\u2019s Interpretation (\u201cInterpretation\u201d) making clear that the vast majority of workers are employees, not independent contractors, regardless of how explicit an agreement between a worker and business defines the relationship as one of an independent contractor.<\/p>\n

Click HERE<\/a> to read the DOL\u2019s Administrative Interpretation.<\/p>\n

According to the Interpretation, \u201cmisclassification of employees as independent contractors is found in an increasing number of workplaces\u201d and is done by employers to skirt labor laws, because workers misclassified as independent contractors may not receive minimum wage, overtime compensation, unemployment insurance, and worker\u2019s compensation benefits.<\/p>\n

Before the Fair Labor Standards Act (\u201cFLSA\u201d), an employment relationship was defined by the degree of control the business asserted over the worker. The more control the business retained over the worker, the more likely the worker was found to be an employee of the business. The FLSA intended to provide a broader scope of employment than found under the \u201ccontrol\u201d test. As a result, according to the DOL, the vast majority of workers are properly classified as employees under the FLSA, rather than independent contractors.<\/p>\n

The FLSA broadly defines \u201cemploy<\/strong>\u201d as \u201cto suffer or permit to work,\u201d and an \u201cemployee<\/strong>\u201d is \u201cany individual employed<\/strong> by an employer<\/strong>, which is \u201cany person acting directly or indirectly in the interest of an employer<\/strong> in relation to an employee<\/strong>.\u201d 29 U.S.C \u00a7 203 (emphasis added). Clarity is rarely the fort\u00e9 of legislation.<\/p>\n

To clear up the definition of an employee under the FLSA, courts introduced the \u201ceconomic realities\u201d test. Unlike the previously used \u201ccontrol\u201d test, which hinged the classification of a worker as an employee solely on the degree to which the business controlled how an employee went about doing his or her job, the economic realities test uses multiple factors to distinguish employees and independent contractors in a way that should be consistent with the \u201cFLSA\u2019s statutory directive that the scope of the employment relationship is very broad,\u201d according to the DOL. Under the economic realities test, the DOL posits that a worker is an employee, rather than an independent contractor, if the worker is economically dependent on the business (in contrast to a worker who is economically independent and operating a business of its own) after analyzing the totality of the following factors:<\/p>\n