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Lindsay M. Massillon of Fowler White Burnett. Lindsay M. Massillon of Fowler White Burnett.

On Jan. 6, the Department of Labor (DOL) issued the Final Rule clarifying the standard for independent contractor classification. The Final Rule, effective March 8, 2021, adopts the regulations largely as proposed in the department’s Sept. 22, 2020, Proposed Rule. The Final Rule adds a new Part 795 to the Fair Labor Standards Act (FLSA) titled “Employee or Independent Contractor Classification under the Fair Labor Standards Act.” While this is welcomed news for employers, the future of the Final Rule under the Biden Administration is uncertain. Further, the Final Rule is not binding on state governments and therefore will not impact local or state laws on the issue. Also, employers should be aware that the regulation only applies to laws which the DOL has authority to regulate and therefore does not change the IRS Code or definitions of “employee” under Title VII or other employment laws.

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