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Now in Effect: DOL Final Rule on Classification of Independent Contractors

Client Alert

Effective March 11, 2024, the U.S. Department of Labor (DOL) has adopted a new standard for the classification of employees versus independent contractors — a much anticipated update since the DOL issued its Final Rule on January 9, 2024, as previously discussed by BMD

In brief, the Fair Labor Standards Act (FLSA) creates significant protections for workers related to minimum wage, overtime pay, and record-keeping requirements. That said, such protection only exists for employees. This can incentivize entities to classify workers as independent contractors; however, misclassification is risky and can be costly. 

New guidance requires the use of a six-factor totality-of-the-circumstances analysis to determine whether the economic realities of the working relationship favor classification as an employee or an independent contractor. Put simply, and per the DOL, if the economic realities demonstrate that the worker is economically dependent on the entity for work, then the worker is an employee. Conversely, if the economic realities demonstrate that the worker is in business for themselves, then they are an independent contractor. 

In making this determination, entities are now required to consider, without limitation: (1) a worker’s opportunity for profit or loss depending on managerial skill; (2) investments by either the entity and/or the worker; (3) the degree of permanence in the working relationship; (4) the nature and degree of control; (5) whether the work performed is integral to the entity’s business; and (6) the skill and initiative required for the work. 

In light of the new guidance, now is a great time for entities to review their working relationships and stay ahead on classification issues to avoid liability under the FLSA.

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.


Corporate Transparency Act: Business Owners Must Act Now

The Corporate Transparency Act requires all reporting companies to file their Beneficial Ownership Information (BOI) report by year-end to avoid penalties. Companies formed before January 1, 2024, have less than six months to comply. Learn more in a client alert by BMD Member Blake Gerney.

New Medicare Billing Rules: What MFTs, MHCs, and IOP Providers Need to Know

Starting January 1, 2024, Medicare began covering services provided to Medicare beneficiaries by marriage and family therapists, mental health counselors, and Intensive Outpatient Program (IOP) services. With this change, Medicare has become the primary payer for these services.

Chevron Doctrine No More: What the Supreme Court’s Ruling Means for Agency Authority

On June 28, 2024, the Supreme Court invalidated the Chevron doctrine, nearly 40 years after it first took effect.

Ohio Board of Pharmacy Update: Key Regulatory Changes and Proposals You Need to Know

The Ohio Board of Pharmacy (BOP) has rescinded certain OAC rules (OAC 4729:5-18-01 through 4729:5-18-06), removing regulations on office-based opioid treatment (OBOT) clinics. The rescissions took effect on June 3, 2024. The BOP also published a new rule, OAC 4729:8-5-01, which sets explicit reporting guidelines for licensed dispensaries and became effective on June 7, 2024.

LGBTQIA+ Patients and Discrimination in Healthcare

In early April, the Kaiser Family Foundation released a study outlining the challenges that LGBT adults face in the United States related to healthcare. According to the study, LGBT patients are “twice as likely as non-LGBT adults to report negative experiences while receiving health care in the last three years, including being treated unfairly or with disrespect (33% v. 15%) or having at least one of several other negative experiences with a provider (61% v. 31%), including a provider assuming something about them without asking, suggesting they were personally to blame for a health problem, ignoring a direct request or question, or refusing to prescribe needed pain medication.”