For seven decades, courts and the U.S. Department of Labor have used a multifactor test to determine whether a worker is “economically dependent” on a company (and thus an employee) or in business for herself (and thus an independent contractor) under the Fair Labor Standards Act. One of those factors—whether the work is “part of the integrated unit of production”—has received relatively little attention, until recently. Over the past decade, some courts and Labor Department officials, including Secretary Marty Walsh, have tried to reframe the inquiry as whether the work is “important” to the company’s business.
The debate is not mere semantics. Millions of Americans are independent contractors, who perform work that is “important” to the companies they contract with. Changing the test from “integration” to “importance” threatens to deprive them of the ability to work as independent contractors and would lead to greater inconsistency and less predictability in the legal treatment of relationships between workers and companies.Andrew G.I. Kilberg of Gibson, Dunn & Crutcher. (Courtesy photo)