Texas Business Today, April 2024 Page: 4
7 p. : col. ill.View a full description of this periodical.
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Register Today!
New Independent Contractor Rule from
the U.S. Department of Labor
By: Mario Hernandez
Legal Counsel to Commissioner Joe Esparza
Worker classification is an important issue for employers.
Some employers might think that properly classifying a worker
as an independent contractor is solely a matter of agreement
or convenience. However, there are actually tests that regulating agencies will use to
determine whether a worker has been properly classified.
One such test is the "economic realities test" used by the U.S. Department of Labor
(DOL), and on March 11, 2024 a new rule went into effect regarding how DOL will
analyze worker classification issues. Per DOL's website, the factors of the final rule are
the following:
"(1) opportunity for profit or loss depending on managerial skill;
(2) investments by the worker and the potential employer;
(3) degree of permanence of the work relationship;
(4) nature and degree of control;
(5) extent to which the work performed is an integral part of the potential employer's
business; and
(6) skill and initiative."
(See: https://www.dol.qov/agencies/whd/flsa/misclassification/rulemakinq/faqs#s7)It should also be noted that in addition to the factors above, other factors could also be
considered in the classification analysis if they demonstrate that the worker is truly in
business for themself, as opposed to being an employee of an employer.
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Texas Workforce Commission. Office of the Commissioner Representing Employers. Texas Business Today, April 2024, periodical, April 2024; Austin, Texas. (https://texashistory.unt.edu/ark:/67531/metapth1680993/m1/4/: accessed July 17, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu; crediting UNT Libraries Government Documents Department.