DOL Issues Final Rule for Independent Contractors

01/09/2024 12:44 PM | Maggie Garry (Administrator)

On January 9th, the US Department of Labor released a final rule which changes the criteria for classifying independent contractors which will take effect on March 11th.  Employers will use a new test which includes six factors:   

  1. The degree to which the employer controls how the work is done.
  2. The worker’s opportunity for profit or loss.
  3. The amount of skill and initiative required for the work.
  4. The degree of permanence of the working relationship.
  5. The worker’s investment in equipment or materials required for the task.
  6. The extent to which the service rendered is an integral part of the employer’s business.

Each factor carries the same amount of weight as the others.  The new rule rescinds a 2021 rule in which 2 core factors (control over the work & opportunity for profit/loss) were used to determine the status of independent contractor.  The DOL will be releasing more guidance to assist with the final rule.    

Sioux Empire SHRM is a 501(c)6 non-profit organization. | PO Box 1302 | Sioux Falls, SD 57101 | Chapter #217

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