US DOL issue new rules to be effective on March 14 2024. Whether a worker is an employee or an independent contractor under the FLSA is determined by looking at the economic realities of the worker’s relationship with the employer. 

The following factors are use to make an assessment of whether a worker is an employee under the FLSA or an independent contractor in business for themself.

1. Opportunity for profit or loss depending on managerial skill,
2. Investments by the worker and the employer,
3. Permanence of the work relationship,
4. Nature and degree of control,
5. Whether the work performed is integral to the employer’s business, and
6. Skill and initiative.

The penalties for misclassifying an employee as an independent contractor can be quite severe. They may include a government investigation, which frequently leads to the employer having to pay back taxes and fines to the government. Also, workers who were misclassified as independent contractors may bring civil lawsuits to recover lost wages and benefits from the employer, and may even recover their attorneys fees and costs of suit.