Specifically, the final rule revises the department’s guidance by: The new rule’s realignment of the department’s guidance with judicial precedent will reduce confusion, improve compliance and better protect working people. Importantly, the final rule rescinds the 2021 Independent Contractor Rule, which we believe is out of sync with longstanding judicial precedent and increased the likelihood of misclassification. This rule will help to ensure that workers who are employees are paid the minimum wage and overtime due them, and that responsible employers that comply with the law are not placed at a competitive disadvantage when competing against employers that misclassify employees. Today, the Department of Labor published a final rule, Employee or Independent Contractor Classification Under the Fair Labor Standards Act, to provide guidance on whether a worker is an employee or independent contractor under the FLSA. To do so effectively, we must help businesses and workers understand how to differentiate employees from independent contractors who are in business for themselves. The Wage and Hour Division is committed to protecting employees’ rights across America.
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