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Employee or Independent Contractor? New Guidance Issued by the Department of Labor

Client Alert
January 10, 2024

On January 9, 2024, the U.S. Department of Labor (DOL) issued its long-awaited final rule — effective March 11, 2024 — revising its prior interpretation of worker classifications under the federal Fair Labor Standards Act (FLSA).

The new final rule rescinds the standard previously established in 2021, in turn, shifting the analysis of whether a worker is an employee (versus an independent contractor) of a business from a more streamlined “economic reality” test to a more complex “totality of the circumstances” standard.

Understanding and correctly applying this new analysis is critical given the implications of worker misclassification under the FLSA — employees are entitled to minimum wage, overtime pay, and other benefits, whereas independent contractors are not entitled to such benefits but enjoy greater flexibility and independence.

Under the new standard, the following non-exhaustive list of factors will be taken into consideration:

  1. The opportunity for profit or loss a worker might have based on their skillset (i.e., factors that impact a worker’s economic success or failure);
  2. The financial state and nature of any resources (e.g., capital or entrepreneurial) a worker has invested in the work;
  3. Degree of permanence of the work relationship (i.e., whether the work relationship is indefinite versus temporary in nature);
  4. The degree of control an employer has over the person’s work (e.g., who sets the worker’s schedule, who oversees and/or directs performance, and whether the worker can maintain other jobs);
  5. Whether the work the person does is essential (i.e., critical, necessary, or central) to the employer’s business; and
  6. The worker’s skill and initiative, including whether the worker contributes to business-like initiatives.

While the above analysis is, again, limited to worker classifications under the FLSA, it is very likely to have a significant impact going forward as, per the DOL, the final rule is intended to stretch broadly across all industries to “reduce the risk that employees are misclassified as independent contractors while providing a consistent approach for businesses that engage with individuals who are in business for themselves.”

The new final rule, while not controlling law, will inevitably serve as persuasive guidance in federal misclassification cases.

For additional information on the new DOL guidance or how it may impact your company, please reach out to Monica Andress at (330) 253-9153 or mbandress@bmdllc.com, or any member of the Labor and Employment Team of Brennan, Manna & Diamond LLC.

FLSADOLU.S. Department of LaborWorker ClassificationsMonica Andress
Client Alert

Ohio House Bill 537: Proposed Regulations for Midwives and Birthing Centers

January 28, 2026House Bill 537, introduced in the Ohio House of Representatives, proposes a comprehensive regulatory framework for certified nurse-midwives, certified midwives, licensed midwives, and traditional midwives. The legislation would clarify scope of practice, establish licensure standards, and impose new requirements for freestanding birthing centers and home births. Healthcare providers and facilities should be aware of the proposed changes and their potential operational impact.Client Alert

Proposed Health Information Privacy Reform Act Expands Protections Beyond HIPAA

January 26, 2026The Health Information Privacy Reform Act (HIPRA) seeks to extend privacy protections to health data not covered under HIPAA, including data collected by apps and wearables. HIPRA introduces broader definitions of protected health information, strengthens privacy and security requirements, establishes patient notification rights, and sets national de-identification standards. Companies processing health data should monitor developments to ensure compliance.Client Alert

Medicare Updates on Skin Substitutes: LCDs Withdrawn, Payment Changes Take Effect

January 23, 2026Medicare’s planned Final Local Coverage Determinations (LCDs) for skin substitutes were withdrawn in late December 2025, meaning previous coverage rules remain in effect. The 2026 Medicare Physician Fee Schedule introduces a single payment rate of approximately $127.14 for these products. Providers should review implications for diabetic foot and venous leg ulcer treatments.Client Alert

Understanding the Seven Core Elements of an Effective Healthcare Compliance Program

January 22, 2026The Affordable Care Act requires healthcare providers participating in Medicare, Medicaid, and CHIP to maintain an effective compliance program. Guidance from the Department of Health and Human Services and the Office of Inspector General outlines seven core elements that form the foundation of these programs, from written policies and compliance oversight to auditing, training, and corrective action. This alert highlights each element and explains how practices can tailor compliance programs to their size and risk profile while meeting federal expectations.Client Alert

Preventing a Board Investigation

January 21, 2026Healthcare professionals in Ohio are subject to licensing board investigations that can lead to disciplinary action. Staying compliant with regulations, documenting carefully, and operating within your professional scope can help prevent issues. If contacted by a board, working with an attorney is critical to protect your license and rights.
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