fact sheet

dol worker classification

You may have heard of the new DOL Worker Classification rule, but what factors are they looking at? It’s important to understand the various considerations at play, as the full picture is critical for avoiding misclassification. Keep reading for a breakdown of what you should know.

1. opportunity for profit or loss

Can/does the worker make business decisions that affect their economic success or failure? Does the worker determine and negotiate pay rate, have authority over purchasing and hiring for their business, engage multiple clients in a year? 

2. investment by the worker

Are the investments the worker makes into their business entrepreneurial in nature? Have they formally incorporated their business? Do they keep insurance for their business? Do they pay for their own expenses?​ 

3. Degree of Permanence of the Work Relationship

Assignments should be definite, non-exclusive, project-based, and/or sporadic. 

4. Nature and Degree of Control

Includes factors like who sets the worker’s schedule and pay rate, supervising worker performance, technological supervision, placing demands on worker’s time, ownership of work product. *Reminder – self-scheduling hours and lack of supervision is not indicative of IC status alone. All data related to degree of control will be weighed.​ 

5. Extent to Which Work Performed is Integral Part of the Employer’s Business

Does the worker perform work that the business exists to perform? Is the work critical, necessary, or central to the services provided by the business?

6. Skill and Initiative

Does the worker use specialized skills to perform the work? Does the worker depend on training or oversite from the employer?​

7. additional factors

Any other factors that could indicate economic dependence on the employer for work.​ 

don’t forget

The new DOL rule considers the sum of all the facts. You may check individual boxes, but the full picture could still lean toward misclassification.

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​*As your talent solutions and workforce management partner, we monitor developments that could affect your business. However, please note that this update is not exhaustive, and the information provided is not intended as legal advice and should not be relied upon as such. If you require legal advice, we recommend consulting with a qualified attorney to understand how your business could be impacted by any new legislation.

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