New Worker Classification Rule is Tightening the Definition of Independent Contractors, Employee Benefit News
New Worker Classification Rule is Tightening the Definition of Independent Contractors, Employee Benefit News
Linda Bond Edwards was interviewed for an article published by Employee Benefit News on February 1, 2024 about the new worker classification rule.
“Generally, the more control you exercise over an individual, the less likely that person is an independent contractor,” said Linda Bond Edwards, partner at RumbergerKirk. “The more structured the employer makes the job, the more that person looks like an employee in a contract.”
She explained the updated rule includes a six-factor test, essentially asking employers what degree of agency the worker has, and whether they gain an entrepreneurial benefit from partnering with that employer. An independent contractor should be able to set their own rate and schedule within reason, and contribute to the business for a set amount of time. Additionally, independent contractors should be free to work with other businesses.
“For example, if a worker is an independent contractor at a restaurant, they may come in as a cook on certain days at dinner time. They may bring their own equipment, and may work at other restaurants or own related businesses like a food truck. Beyond the set hours that the worker is at the restaurant, the employer has no control over them. If the independent contractor doesn’t at least have that much agency, then it may be time to reclassify, underlines Edwards.”