In February we notified clients that the independent contractor rule scheduled to go into effect on March 8 was being delayed for further review. On May 5, 2021, the US Department of Labor (DOL) announced that the “Independent Contractor Status Under the Fair Labor Standards Act” final rule was being withdrawn. In support of its decision the DOL stated,
[T]he Rule is inconsistent with the FLSA’s text and purpose, and would have a confusing and disruptive effect on workers and businesses alike due to its departure from longstanding judicial precedent.
https://www.dol.gov/agencies/whd/flsa/2021-independent-contractor. The withdrawal is available here: https://www.federalregister.gov/public-inspection/2021-09518/independent-contractor-status-under-the-fair-labor-standards-act-withdrawal.
Thus, effective May 6, 2021, we’re again bound by the “old” rule. That is, when determining the nature of a relationship, consider whether:
If, in anticipation of the rule becoming effective, you changed how you categorized such relationships, now is the time to re-evaluate those arrangements to ensure that you have an independent contractor, not an employee.