DOL Narrows Definition of Independent Contractors        July 28, 2015

Six Factors 
In conducting an economic realities test, the DOL noted that an employer should look to six factors: 

Last week, the U.S. Department of Labor, Wage and Hour Division (“DOL”) published new guidance addressing misclassification of independent contractors, emphasizing the broad scope of employment under the Fair Labor Standards Act (“FLSA”).  DOL’s guidance, published as Administrator’s Interpretation 2015-1, examines the longstanding, multi-factor “economic realities” test used to determine whether someone is a bona fide independent contractor or an employee. This guidance defines “independent contractor” narrowly enough for many previously classified as independent contractors to now be properly classified as employees. 
This narrowing of the definition of independent contractor is due partly to the DOL deemphasizing the degree to which a business controls an individual’s work, and focusing instead on whether the worker is economically dependent on the employer or in business for him or herself..

Article by Adrienne Lewis, Managing Partner of The Lewis Consulting Group, LLC.  Human Resources, Operations and Business Advisory Services.

  • The extent to which the work performed is an integral part of the employer’s business. 
  • The worker’s opportunity for profit or loss depending on his or managerial skill. 
  • The extent of the relative investments of the employer and the worker. 
  • Whether the work performed requires special skills and initiative. 
  • The permanency of the relationship. 
  • The degree of control exercised or retained by the employer. 

The DOL also  noted that  each factor needs to be examined and analyzed in relation to one another, and that no single factor is determinative.  The DOL Administrative Interpretation can be found at

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