With the stroke of a pen in July 2015, former Secretary of Labor Tom Perez issued an “Interpretation” of the test to determine if an individual is an employee or an independent contractor under the Fair Labor Standards Act (FLSA). The new interpretation determined that “most workers are employees.” Under this interpretation, independent flooring installers had to invest in their business beyond a truck and tools, had to show they had business skill not just technical skills, and could not work more than one or two jobs for a retailer or risk being classified as an employee.
Just as easily as it was imposed, the new Interpretation was withdrawn. In a three-sentence press release, Labor Secretary Alexander Acosta announced that the new Interpretation was revoked. As the press release stated, however, the withdrawal of the Interpretation does not change the legal responsibilities of employers under the FLSA, and the Department of Labor will continue to fully and fairly enforce the laws regarding independent contractors.
Moreover, the withdrawal of the Interpretation does not impact state action, who will continue to crackdown on misclassifying workers as independent contractors. Accordingly, the Interpretation by former Secretary Perez, which was nearly impossible to meet by most flooring dealers and contractors, is withdrawn; but federal and state agencies will continue to enforce the rules and challenge improper classification of independent contractors.
For more information, please request a copy of the World Floor Covering Association’s book, “The Independent Contractor: Understanding the Rules and a Model Contract.” The book provides a model independent contractor contract and explains the various issues regarding independent contractors. Association members may download a copy of this book in the primers and handbooks section of this site at:
