Worker classification is a hot issue right now. The recent California law that classifies most workers as employees has completely upended the gig economy in that state, so it is no surprise that the law is being challenged by a number of business groups.
Under federal law, whether an employer classifies a worker as an employee or an independent contractor can have major economic consequences, especially if the worker is misclassified. For example, wrongly misclassifying an employee as an independent contractor can result in liability under the Fair Labor Standards Act (FLSA) for unpaid minimum wage and/or overtime compensation. Multiplied by two if the misclassification is considered a willful violation of the FLSA.
Today, the U.S. Department of Labor (DOL) announced a proposed rule offering what it claims to be clarity to determine whether a worker is an employee under the Fair Labor Standards Act (FLSA) or an independent contractor.