What to Know About the Independent Contractors Final Rule

Workforce; Compliance

On January 10, 2024, the U.S. Department of Labor (DOL) published a final rule, entitled Employee or Independent Contractor Classification Under the Fair Labor Standards Act, which goes into effect on March 11, 2024. This rule revises the Department’s guidance on how the agency determines who is an employee or independent contractor under the Fair Labor Standards Act (FLSA). It specifically rescinds the Independent Contractor Status Under the Fair Labor Standards Act rule (2021 IC Rule), that was published on January 7, 2021, under the Trump Administration, and essentially reverts to the agency's earlier and broader multi-factor economic realities test.  

The new standard will, in certain circumstances, make it more difficult for long term care providers to properly classify a worker as an independent contractor. Likewise, this final rule has the potential to place greater financial and legal burdens on long term care providers as existing contract workers may now need to be reclassified as employees under the new standards. More specifically, the rule includes that a worker is not an independent contractor if they are, as a matter of economic reality, economically dependent on an employer for work.​

AHCA/NCAL has provided a summary for its members with additional, vital information. Please note that an AHCA/NCAL member log-in is required to view the summary. Contact Dana Ritchie with questions or comments.