“It is time to rethink a standard that is rooted in common law from hundreds of years ago.
One place to start to look for a new approach is the Fair Labor Standards Act (FLSA). The FLSA already has standards for exempt employees – those whose work meets particular tests are exempt from overtime pay requirements. Allowing workers to be presumed to be independent if they satisfy the requirements for a learned professional exemption or creative professional exemption might be an approach that adapts existing ideas and enables companies more confidence in hiring independent contractors.
The learned professional exemption requires the worker be paid at a minimum rate, perform work requiring advanced knowledge which is predominantly intellectual in character, and requires consistent exercise of discretion. The knowledge must be in a field of science or learning that is customarily acquired by a prolonged course of specialized instruction.
The creative professional exemption requires the worker to be paid a minimum rate, perform work requiring invention, imagination, originality, or talent in a recognized field of artistic or creative endeavor. Either of these existing standards could be used to create a presumption that worker is an independent contractor. Moreover, the FLSA had an exemption for highly compensated workers (workers who perform office or non-manual work, meet the requirements of other exemptions, and are paid more than $100,000).
The FLSA standards for exempt employees are widely used today and would be an easy transition for companies and workers. Independent contractors who satisfy requirements similar to those in place for learned professionals, creative professionals, or highly compensated employees would be presumed to be independent. This would allow businesses to hire independent contractors with less risk of the IRS or state agencies second-guessing the classification and imposing fines and penalties for misclassification….”