New DOL Rule in Effect March 11, 2024. Is your business compliant? Don’t Pay Double for your Independent Contractors

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GREENVILLE, SC – Area businesses which rely on independent contractors should note the US Department of Labor’s recently adopted a new six-factor test for determining worker classification under the Fair Labor Standards Act, which narrows the definition of who is an independent contractor. This new rule goes into effect on March 11, 2024.

The six factors to consider when determining a worker’s status are:

1. Opportunity for profit or loss depending on managerial skill;
2. Investments by the worker and the potential employer;
3. Degree of permanence of the work relationship;
4. Nature and degree of control;
5. Extent to which the work performed is an integral part of the potential employer’s business; and
6. Skill and initiative.

The Department of Labor has said that these factors are not exhaustive. Instead, the analysis uses a totality-of-the-circumstances “economic reality” approach, which allows consideration of other relevant, but unenumerated, factors that “in some way indicate whether the worker is in business for themself.” Where the worker is dependent on the employer for work, they will not qualify as an independent contractor under this rule.

Misclassifying workers can mean serious consequences for employers, including:
• Owing double the worker’s damages
• Paying the other side’s attorney’s fees and costs
• Individual liability – you’re not shielded by the corporation– for individuals who had a hand in the misclassification; and
• To the extent a settlement is reached, the agreement itself—and the amounts paid—is public information.
• (And this list doesn’t include IRS and/or DOL penalties.)

Kim, Lahey & Killough attorney Casey Martens will review the US Department of Labor’s new six-factor test and the new Fair Labor Standards Act independent contractor classification changes during a Lunch & Learn event on Thursday, March 7th from 12:00 Noon to 1:00 PM at the Thornblade Club in Greer. This event is complimentary; however seating is limited and registration is required: https://www.eventbrite.com/e/fair-labor-standards-act-labor-law-lunch-learn-with-casey-martens-tickets-840791208137?aff=oddtdtcreator

About Attorney Casey Martens:
Casey Martens heads up Kim Lahey & Killough’s Brevard, North Carolina office and works with clients throughout the Carolinas and Georgia. Her law practice focuses in the areas of employment law counseling and compliance, employee investigations, wage and hour disputes, business disputes and litigation, contracts, trademark analysis and registration. She has been recognized as a South Carolina Rising Star in Employment Law, and a SC Legal Elite of the Upstate by Greenville Business Magazine. Casey Martens is licensed to practice law in South Carolina, North Carolina and Georgia.

About Kim, Lahey & Killough Law Firm
With offices in Greenville and Charleston, SC and Brevard, NC, the Kim, Lahey & Killough Law Firm is devoted to helping clients establish, enforce, and leverage their intellectual property rights from the Upstate, to the Lowcountry to across the globe. For more information, visit the firm website at kimandlahey.com.