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On May 5th 2021, the Department of Labor withdrew the “Independent Contractor Status Under the Fair Labor Standards Act (FLSA)” final rule, which went into effect immediately on May 6th 2021. This final ruling clarifies the standard for classification by determining whether an individual is in business for themselves or is economically dependent on an employer for work.

The department has withdrawn the rule for several reasons, including:

  • The independent contractor rule was in tension with the FLSA’s text and purpose, as well as relevant judicial precedent.
  • The rule’s prioritization of two “core factors” for determining employee status under the FLSA would have undermined the longstanding balancing approach of the economic realities test and court decisions requiring a review of the totality of the circumstances related to the employment relationship.
  • The rule would have narrowed the facts and considerations comprising the analysis of whether a worker is an employee or an independent contractor, resulting in workers losing FLSA protections.

The main difference between this new ruling and AB5 is that the FLSA does not prevent states from setting up broader wage and hour protections. Thus, some states could potentially be unaffected by this ruling.

To help you navigate the complexities of this new ruling, we will discuss employee classification and the use of independent contractors in California as well as the Department of Labor’s most recent rulings.

Key topics covered in this online CPE webinar:

  • Why classification matters?
  • Who qualifies as an independent contractor?
  • What is the new rule?

This course is eligible for 1 CPE credit, 1 PDC credit, or 1 General Education credit.

Register here: REGISTRATION

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