By: Christina M. Reger

As non-exempt (hourly) employees, workers are guaranteed minimum wage, overtime compensation, and a host of insurances. Independent contractors do not enjoy such perks. In breaking news last week, the Department of Labor published a memo emphasizing the broad and expansive definition of employee under the Fair Labor Standards Act (FLSA) and concluding (some may say cautioning) that “most workers are employees.”

Due in large part to the growing number of independent contractors and the corresponding decrease in the number of “employees,” Administrator Weil’s memo interpreted the FLSA’s “suffer or permit to work” and provided an “economic realities test” to assist employers in determining whether their workers are employees or truly independent contractors by asking these six simple questions:

Is the work performed an integral part of the employer’s business?

Does the worker have an opportunity to impact profit or loss?

Does the worker have an investment in the business relationship?

Does the worker utilize special skills or take independent initiative?

Is the relationship between the worker and the employer permanent or indefinite? Does the business exercise significant control over the worker?

Now is the time, to (call me) take a look at your workforce. Otherwise, you could be (calling me) looking at back pay for up to three years, interest, penalties, and oh yeah, attorneys’ fees.

In case you can’t get enough of this information, here is the link to the complete memo:

http://www.dol.gov/whd/workers/Misclassification/AI-2015 1.pdf