How to Apply the DOL's Independent Contractor Test

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: 

1. Opportunity for profit or loss depending on managerial skill
2. Investments by the worker and 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
6. Skill and initiative 

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