Per the US Department of Labor (DOL): "On January 10, 2024, the U.S. Department of Labor published a final rule Employee or Independent Contractor Classification Under the Fair Labor Standards Act, effective March 11, 2024, revising the Department’s guidance on how to analyze who is an employee or independent contractor under the Fair Labor Standards Act (FLSA). This final rule rescinds the Independent Contractor Status Under the Fair Labor Standards Act rule (2021 IC Rule, 86 FR 1168), that was published on January 7, 2021."
Essentially, this administrative rule change restored the standard of considering the "totality-of-the-circumstances" using 6 primary factors:
- The degree to which the employer controls how the work is done.
- The worker’s opportunity for profit or loss.
- The amount of skill and initiative required for the work.
- The degree of permanence of the working relationship.
- The worker's investment in equipment or materials required for the task.
- The extent to which the service rendered is an integral part of the employer's business.
The IRS also has a different set of standards for determining worker classification and there is an agreement between the two agencies to share information on individual workers. Thus a worker being considered an employee under either standard is likely sufficient to treat them as an employee.
The article "Employee or Independent Contractor?" provides more detailed information and includes several helpful resources.