On January 6, 2021, the Department of Labor (Department) announced a rule addressing the distinction between employees and independent contractors under the Fair Labor Standards Act (FLSA). The rule was published in the Federal Register on January 7, 2021, and was initially scheduled to take effect on March 8, 2021. See 86 FR 1168 (Independent Contractor Rule).
On February 5, 2021, the Department published a proposal to delay the Independent Contractor Rule’s effective date until May 7, 2021, 60 days after the original effective date. See 86 FR 8326. On March 4, 2021, after considering approximately 1,500 comments received in response to that proposal, the Department published a final rule delaying the effective date of the Independent Contractor Rule to May 7, 2021, as proposed. See 86 FR 12535.
On March 12, 2021, the Department published a notice of proposed rulemaking (NPRM) proposing to withdraw the Independent Contractor Rule. See 86 FR 14027. On May 5, 2021, after reviewing approximately 1,000 comments submitted in response to the NPRM, the Department announced a final rule withdrawing the Independent Contractor Rule. This withdrawal took effect immediately upon the final rule’s publication in the Federal Register on May 6, 2021, meaning that the Independent Contractor Rule never took effect. See 86 FR 24303. As the Department explained in the final rule, the Independent Contractor Rule was inconsistent with the FLSA’s text and purpose, and would have had a confusing and disruptive effect on workers and businesses alike due to its departure from longstanding judicial precedent.
The Department’s longstanding prior guidance addressing the distinction between employees and independent contractors under the FLSA remains in effect. See WHD's Fact Sheet #13, “Employment Relationship Under the Fair Labor Standards Act (FLSA).” For additional information, visit our Wage and Hour Division Website: https://www.dol.gov/agencies/whd and/or call our toll-free information and helpline, available 8 a.m. to 5 p.m. in your time zone, 1-866-4USWAGE (1-866-487-9243).