U.S. Department of Labor releases Guidance on Economic Realities Test

US DOL WHD Administrators InterpretationFrom the United States Department of Labor, the Wage and Hour Division (WHD) announced the release of the  Administrator’s Interpretation 2015-1 which provides guidance on the application of the economic realities test that the Department uses to determine if a worker is an employee or independent contractor.  The WHD states:

On July 15, 2015, the U.S. Department of Labor’s Wage and Hour Division issued Administrator’s Interpretation 2015-1: The Application of the Fair Labor Standards Act’s “Suffer or Permit” Standard in the Identification of Employees Who Are Misclassified as Independent Contractors, which analyzes how the Fair Labor Standards Act’s definition of “employ” guides the determination of whether workers are employees or independent contractors under the law. It discusses the breadth of the FLSA’s definition of “employ,” as well as provides guidance on the “economic realities” factors applied by courts in determining if a worker is indeed an employee.

Additional guidance on misclassification is available on the WHD’s webpage: Misclassification of Employees as Independent Contractors.

From U.S. Department of Labor — Wage and Hour Division (WHD) — Highlights.

In the coming days, I will be sharing comments and guidance of the Administrator’s Interpretation.

A pdf version of the document can be found at Administrator’s Interpretation No. 2015-1

 

 

  1 comment for “U.S. Department of Labor releases Guidance on Economic Realities Test

  1. Jen
    July 23, 2015 at 10:18 AM

    It’s actually beneficial for everyone that they’re clarifying this in writing. An employee is hired within a company and is paid an hourly wage, given a set of number of hours each week. In contrast, a contractor is given a set payment for a specific job. It’s confusing quite frankly.

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