The result is that employers are likely to face more enforcement actions from the DOL related to wage and hour issues. This follows the current trend of increasing actions brought under the Fair Labor Standards Act (FLSA). Since 2004, there has been an 11% increase in wage and hour enforcement actions and a 77% rise in private lawsuits related to wage and hour disputes by the DOL.
An employer’s classification of an individual as an independent contractor bears no weight as the DOL and courts look to a number of factors to determine whether an individual is an independent contractor or employee. Such factors include:
- an employer’s right to control the manner and means by which work is accomplished;
- the skill required to perform specific job duties;
- the duration of the relationship between the parties;
- the employer’s discretion over when and how work is performed; and
- the method of payment.
Unfortunately for employers, there is no bright line test to determine whether an individual is an employee or an independent contractor and the DOL and courts examine such relationships on a case-by-case basis.