The Department of Labor is seeking feedback before it issues a new rule to clarify whether a worker is an employee or independent contractor under the Fair Labor Standards Act.
The department will hold a forum for employers June 24 at 2:30 p.m. ET and a forum for workers June 29 at 5 p.m. ET to hear the perspectives of those who may be affected by employee or independent contractor classification or misclassification.
In March 2021, the Labor Department had sought to delay a rule regarding contractors from the latter days of the Trump administration and then withdrew it in May 2021, believing that it was inconsistent with the FLSA’s text and purpose. This past March, however, a district court said that the rule had taken effect on its original effective date, March 8, 2021, and remained in effect, Jessica Looman, the acting director of the Wage and Hour Division, wrote in a blog earlier this month.
According to the Wage and Hour Division, key differences exist between employees and independent contractors, including who runs the business, who assigns the work and when that work is performed. Employees who are misclassified as independent contractors can be denied minimum wage, overtime pay and other benefits.
The misclassification of employees can cost employers money. For instance, a Lansing, MI, adult foster care company’s practice of misclassifying its residential healthcare workers as independent contractors will cost it $94,000 in back wages, the Labor Department announced last month.