United States of America: Consultation opened on possible delay of Independent Contractor Status Under the Fair Labor Standards Act final rule

On 5 February 2021, the Department of Labor (DOL) opened a consultation on whether to delay the implementation date of the new independent contractor status rule until 7 May 2021. The consultation will be open until 24 February 2021. The reasoning behind this delay is that the new rule is the first of its kind and would signify an important change in labor laws. As such, the DOL wishes more adequate time to consider the legal, policy, and enforcement implications of this new rule. Additionally, a 60 day delay would not have grave consequences. The Department of Labor (DOL) had announced a new rule distinguishing between "employees" and "independent contractors". Previously, there had been regulatory confusion over this distinction. Determining who is considered an employee or an independent contractor was based on a variety of unofficial factors. This rule, according to the DOL, is a mere adoption of what the unofficial definition has been in courts and departments in the first place. Independent contractors are "workers who, as a metter of economic reality, are in business for themselves", whereas employees are dependent on their potential emplyoyer. Determining who is dependent and who is not can be set along five variables, with the most important being the extent of the person's control over their work and the person's probability for obtaining profit or loss.