Employees vs. Independent Contractors - DOL Issues Final Classification Rule

Posted by Keith Blankenship on Jun 20, 2024 3:04:41 PM
Keith Blankenship
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Effective in March 2024, the US Department of Labor has issued a final rule on how workers are classified under the Fair Labor Standards Act (FLSA). This rule was issued to assist employers in determining the status of employees vs. independent contractors, which is especially critical in managing minimum wage and overtime requirements.

The rule relies on a multifactor economic reality test, which confirms that a worker is not an independent contractor if they are economically dependent on an employer for work. Employers should also be aware of Federal and State rules for classifying independent contractors.

Employers will need to receive a completed Federal Form W-9 from all independent contractors, for proper reporting to the IRS and state agencies.

If you have questions about the FLSA, or how to classify and manage employees and independent contractors, leave a comment below or feel free to contact me directly. I’m happy to help!

Topics: Regulatory Updates, Tax, Business Advisory, Small Business