The government warns against misclassification of workers
Independent contractors have become commonplace in the construction industry. However, federal regulators and others believe some employers may be misclassifying employees as independent contractors.
In an effort to combat misclassification by employers, the Department of Labor's (DOL's) Wage and Hour Division released an Administrator's Interpretation (AI) July 15 to help differentiate employees from independent contractors.
The AI examines the economic realities test commonly used by the courts and broadly interprets the Fair Labor Standards Act's (FLSA's) use of "suffer or permit" as the definition of "employ." It is stated no single economic reality factor should be the determining factor—they should be viewed collectively. Under the new guidance, it will be far more difficult to classify workers as independent contractors.