The U.S. Department of Labor announced plans to propose an economic realities test on Thursday to determine whether a worker is an employee or an independent contractor under the Fair Labor Standards Act.
The department said the proposed rule is based on a framework that is consistent with longstanding judicial precedent.
“The ultimate inquiry is whether, as a matter of economic reality, the worker is either economically dependent on the employer for work (and is thus an employee) or is in business for themselves (and is thus an independent contractor),” the rule proposal says.
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