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INDEPENDENT CONTRACTOR OR NOT?….. We have new information for you.

The new regulation poses the question of, “whether, as a matter of economic reality, the workers depend upon someone else’s business for the opportunity to render service or are in the business for themselves.”

Revised Regulation Policy Updates Released Aimed Towards Gig Workers

Before the end of the Trump administration, the U.S. Department of Labor provided a distinct clarification as to which workers are considered employees and which workers are independent contractors. Independent contractors are of course, usually not eligible for employee benefits. 

The new regulation poses the question of, “whether, as a matter of economic reality, the workers depend upon someone else’s business for the opportunity to render service or are in the business for themselves.” 

The revised policy falls upon five overall factors: 

  1. The extent of control over work – Who creates the work schedule? Can an individual work for competitors of the employer? Who selects projects?
  2. The amount of opportunity the worker has for profit and loss – Are workers able to make more money by working extended hours? Can their profit and loss be influenced by employing workers or purchasing materials and needed equipment?
  3. The skill quality and level needed – Is specialized training needed to complete the work? Does the employer provide that training? If the employer does not provide needed specialized training, the worker could possibly be an independent contractor. 
  4. Degree of permanency between the employer and the worker – The worker could be deemed an employee if the work relationship is indefinite or continuous. 
  5. If the work is part of an integrated unit of production – Is the person’s work distinct from the production of the employer’s? 

Furthermore, the revised regulation states that despite what a contact between the two parties may be, the practice of the parties is more pertinent. If a conflict among the contract surfaces, the Department of Labor will step in to decide the reality of the situation. 

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