Misclassification

Subscribe to Misclassification via RSS

On May 1, 2025, the United States Department of Labor’s (“DOL”) Wage and Hour Division announced it would not enforce or apply the Biden-era 2024 Final Rule regarding independent contractor classification (“2024 Rule”). Specifically, the DOL directed its investigators “not to apply the 2024 Rule’s analysis” in enforcement matters. The DOL’s announcement will undoubtedly make it easier to classify workers as independent contractors at the federal level—and continues a seesaw of regulatory pull-back from Biden-era directives. While the 2024 Rule does remain in effect for private litigation and certain state-specific tests still impose higher worker classification standards than the current federal guidelines, the DOL’s announcement is a win for employers seeking to classify workers as contractors.Continue Reading DOL Retracts Biden-Era Independent Contractor Classification Rule

On January 10, 2024, the U.S. Department of Labor (“DOL”) published its final rule that revises its guidance regarding the standard for assessing whether a worker is an employee or independent contractor under the Fair Labor Standards Act (“FLSA”). The final rule rescinds the DOL’s previous final rule that was published at the end of President Trump’s term of office in January 2021. As we previously reported in the wake of the issuance of the Department of Labor’s October 13, 2022 proposed rule, the final rule returns to a totality-of-the-circumstances analysis akin to the “Economic Reality Test.” This new final rule ultimately has the effect of making it more difficult to classify workers as independent contractors. The new final rule goes into effect on March 11, 2024.Continue Reading The Department of Labor Issues New Final Rule for Independent Contractor Classification

The Fair Labor Standards Act of 1938 (“FLSA”) created the right to a minimum wage and overtime pay. The FLSA also provides exemptions to overtime pay requirements for certain employees. Under the “bona fide executive” exemption, “highly compensated employees” are exempt from overtime if performing at least one qualifying job duty. However, on February 22, 2023, the United States Supreme Court, in its 6-3 decision in Helix Energy Solution Group, Inc. v. Hewitt, clarified that highly compensated employees paid on a “day-rate” do not qualify for this exemption because a day-rate does not satisfy the salary basis test.Continue Reading Supreme Court Clarifies a “Day-Rate” Does Not Meet the FLSA “Salary Basis” Test, Even for Highly Compensated Employees

On Monday, the Ninth Circuit vacated a judgment for Grubhub, Inc. and against a former food delivery driver, Raef Lawson, who claimed that he was misclassified as an independent contractor when he performed food delivery services.  Lawson had asserted claims for minimum wage, overtime, and expense reimbursement.
Continue Reading Ninth Circuit Reversed Grubhub’s Victory on Independent Contractor Classification in Light of the Retroactive Application of Dynamex

Since taking office, New Jersey Governor Phil Murphy has prioritized eliminating misclassification of employees as independent contractors.  In furtherance of this goal, on July 8, 2021, Governor Murphy signed four bills into law which make it easier for the state to (i) identify employers who misclassify employees as independent contractors, and (ii) penalize employers for such misclassification.  Highlights from each of these four laws are summarized below:
Continue Reading New Laws Passed in New Jersey Designed to Identify and Penalize Employers Who Misclassify Employees as Independent Contractors