Independent Contractor Or Employee

The Trump-era rule was designed to make it easier for employers to classify workers as independent contractors, rather than traditional employees, by focusing on whether workers are economically dependent upon an employer—or in business for themselves.

The Trump-era test prioritizes two key factors, including (1) the worker’s degree of control over the work performed, and (2) the worker’s opportunity for profit or loss.  Under the Biden administration, the DOL stated that prioritizing these factors for determining employment status under the FLSA undermined the longstanding balancing approach of the economic realities test and court decisions requiring a review of the totality of the circumstances related to the employment relationship.

The Trump DOL rule would result in many workers’ losing FLSA protections, including minimum wage and overtime benefits.

Several business groups filed a lawsuit in federal court to challenge the Biden administration’s acts.  The court vacated the Biden administration’s acts and reinstated the Trump-era rule, determining that the DOL’s delay of the effective date for the Trump-era rule violated the Administrative Procedure Act by providing only a 19-day period for notice and comments (rather than the 30-day minimum).

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Jim Marshall - Independent Contractors Versus Full Time Employees

When it comes to getting work done in your business, you have the option of hiring independent contractors or traditional employees. Both types of workers can get the job done, but there are pros and cons of each that you need to be aware of.

Pros of Hiring Employees

There’s a reason why most companies make the commitment to hire traditional employees over independent contractors. Most companies need the stability of having the same employees day after day, in addition to the following three benefits.

Higher Qualifications

Employees tend to have higher qualifications and more education than independent contractors. When a person has acquired a professional degree or trained for years in a certain industry, they tend to go for jobs that will offer security, stability and substantial pay. Conversely, when a company is looking for solid experience and background, only a traditional employee will do.

More Company Loyalty

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