Legislative Updates

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  • 01/06/2021 9:12 PM | JR Rowenhorst (Administrator)

    On January 6, 2021, the U.S. Department of Labor, Wage and Hour Division announced a final rule clarifying whether an individual is an employee or an independent contractor under the Fair Labor Standards Act (FLSA). The rule:

    • Reaffirms the “economic reality” test which determines whether an individual is in business for themselves (independent contractor) or is economically dependent on a potential employer for work (FLSA employee).
    • Identifies and explains two core factors to determine whether a worker is economically dependent on someone else’s business (employee) or is in business for themselves (independent contractor):
      • The nature and degree of control over the work; and
      • The worker’s opportunity for profit or loss based on initiative and/or investment.

    If those two primary core factors do not point to the same classification, then the rule identifies the following additional factors to determine status:

    • The amount of skill required for the work;
    • The degree of permanence of the working relationship between the worker and the potential employer; and
    • Whether the work is part of an integrated unit of production.

    The rule also:

    • Identifies that the actual practice of the worker and the potential employer is more relevant than what may be contractually or theoretically possible.
    • Provides six fact-specific examples applying the factors.

    The rule is effective March 8, 2021.

  • 01/05/2021 9:08 PM | JR Rowenhorst (Administrator)

    On December 31, 2020 and January 5, 2021, the federal Internal Revenue Service released the following new forms and publications, among many others, for use in 2021:

    • Form W-4 – Employee's Withholding Certificate
    • Form W-4P – Withholding Certificate for Pension or Annuity Payments
    • Publication 531 – Reporting Tip Income
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