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Federal Register / Vol. 86, No. 86 / Thursday, May 6, 2021 / Rules and Regulations
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limits of the employment relationship.16
The Court suggested that federal agencies and courts will find that degrees of control, opportunities for profit or loss, investment in facilities, permanency of relation and skill required in the claimed independent operation are important for decision. 17
The Court cautioned that no single factor is controlling and that the list is not exhaustive.18 The Court went on to note that the workers in that case were from one standpoint an integral part of the businesses of the employer, supporting a conclusion that some of the workers in that case were employees.19
The same day that the Supreme Court issued its decision in Silk, it also issued Rutherford Food Corp. v. McComb, 331
U.S. 722 1947, in which it affirmed a circuit court decision that analyzed an FLSA employment relationship based on its economic realities.20 The Court rejected an approach based on isolated factors and again considered the circumstances of the whole activity. 21
The Court considered several of the factors that it listed in Silk as they related to meat boners on a slaughterhouses production line, ultimately determining that the boners were employees.22 The Court noted, among other things, that the boners did a specialty job on the production line, had no business organization that could shift to a different slaughter-house, and were best characterized as part of the integrated unit of production under such circumstances that the workers performing the task were employees of the establishment. 23
Since Silk and Rutherford Food, federal courts of appeals have applied the economic realities test to distinguish independent contractors from employees who are entitled to the FLSAs protections. Recognizing that the common law concept of employee had been rejected for FLSA purposes, courts of appeals followed the Supreme Courts instruction that employees are those who as a matter of economic realities are dependent upon the 16 331 U.S. at 716. At the time, the Supreme Court noted that decisions that define the coverage of the employer-employee relationship under the Labor and Social Security acts are persuasive in the consideration of a similar coverage under the Fair Labor Standards Act. Rutherford Food Corp. v.
McComb, 331 U.S. 722, 72323 1947. However, Congress amended the Social Security Act in 1948.
17 331 U.S. at 716.
18 See id.
19 Id.
20 See Rutherford Food, 331 U.S. at 727.
21 Id. at 730.
22 See id.
23 Id. at 72930.

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business to which they render service. 24
All of the courts of appeals have followed the economic realities test, and nearly all of them analyze the economic realities of an employment relationship using the factors identified in Silk.25 No court of appeals considers any factor or combination of factors to universally predominate over the others in every case.26 For example, the Ninth Circuit has explained that some of the factors which may be useful in distinguishing employees from independent contractors for purposes of social legislation such as the FLSA are: 1
The degree of the employers right to control the manner in which the work is to be performed; 2 the workers opportunity for profit or loss depending upon his or her managerial skill; 3 the workers investment in equipment or materials required for his or her task, or employment of helpers; 4 whether the service rendered requires a special skill;
5 the degree of permanence of the working relationship; and 6 whether the service rendered is an integral part of the employers business.27 The Ninth Circuit repeated the Supreme Courts instruction that no individual factor is conclusive and that the ultimate determination depends upon the circumstances of the whole activity.28
Some courts of appeals have applied the factors with some variations. For example, the Fifth Circuit typically does not list the integral factor as one of 24 Usery v. Pilgrim Equip. Co., 527 F.2d 1308, 1311 5th Cir. 1976 quoting Bartels v.
Birmingham, 332 U.S. 126, 130 1947.
25 See Baystate Alternative Staffing, Inc. v.
Herman, 163 F.3d 668, 675 1st Cir. 1998; Brock v. Superior Care, Inc., 840 F.2d 1054, 105859 2d Cir. 1988; Donovan v. DialAmerica Mktg., Inc., 757
F.2d 1376, 138283 3d Cir. 1985; McFeeley v.
Jackson Street Entmt, LLC, 825 F.3d 235, 241 4th Cir. 2016; Acosta v. Off Duty Police Services, Inc., 915 F.3d 1050, 1055 6th Cir. 2019; Secretary of Labor, U.S. Dept of Labor v. Lauritzen, 835 F.2d 1529, 1534 7th Cir. 1987; Karlson v. Action Process Service & Private Investigation, LLC, 860
F.3d 1089, 1092 8th Cir. 2017; Real v. Driscoll Strawberry Associates, Inc., 603 F.2d 748, 754 9th Cir. 1979; Acosta v. Paragon Contractors Corp., 884
F.3d 1225, 1235 10th Cir. 2018; Scantland v. Jeffry Knight, Inc., 721 F.3d 1308, 1311 11th Cir. 2013;
Morrison v. Intl Programs Consortium, Inc., 253
F.3d 5, 11 D.C. Cir. 2001.
26 See, e.g., Parrish v. Premier Directional Drilling, L.P., 917 F.3d 369, 380 5th Cir. 2019
stating that it is impossible to assign to each of these factors a specific and invariably applied weight citation omitted; Martin v. Selker Bros., 949 F.2d 1286, 1293 3d Cir. 1991 It is a wellestablished principle that the determination of the employment relationship does not depend on isolated factors . . . neither the presence nor the absence of any particular factor is dispositive.;
Scantland, 721 F.3d at 1312 n.2 observing that the relative weight of each factor depends on the facts of the case.
27 Real, 603 F.2d at 754.
28 See id.

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the considerations that guides the analysis.29 Nevertheless, the Fifth Circuitrecognizing that the listed factors are not exhaustivehas considered the extent to which a workers function is integral to a business as part of its economic realities analysis.30 The Second Circuit varies in that it treats the employees opportunity for profit or loss and the employees investment as a single factor, but it still uses the same considerations as the other circuits to inform its economic realities analysis.31
In sum, since the 1940s, federal courts have consistently analyzed the question of employee status under the FLSA by examining the economic realities of the employment relationship to determine whether the worker is dependent on the employer for work or is in business for him or herself.32 In doing so, courts have looked to the six factors first articulated in Silk as useful guideposts while acknowledging that those factors are not exhaustive and should not be applied mechanically.33
B. Prior Wage and Hour Division Guidance Since at least 1954, the Wage and Hour Division WHD has applied variations of this multifactor analysis when considering whether a worker is an employee under the FLSA or an independent contractor.34 In a guidance document issued in 1964, WHD stated, The Supreme Court has made it clear that an employee, as distinguished from a person who is engaged in a business of his own, is one who as a matter of economic reality follows the usual path of an employee and is dependent on the business which he serves. 35 Like the courts, WHD has consistently applied a multifactor economic realities analysis when determining whether a worker is an employee under the FLSA or an independent contractor.36
29 See
Usery, 527 F.2d at 1311.
Hobbs v. Petroplex Pipe and Constr., Inc., 946 F.3d 824, 836 5th Cir. 2020.
31 See, e.g., Franze v. Bimbo Bakeries USA, Inc., 826 F. Appx 74, 76 2d Cir. 2020.
32 See, e.g., Franze, 826 F. Appx at 76; Razak v.
Uber Techs., Inc., 951 F.3d 137, 14243 3d Cir.
2020 cert. pet. filed Apr. 8, 2021; Gilbo v.
Agment, LLC, 831 F. Appx 772, 775 6th Cir. 2020.
33 See, e.g., Superior Care, 840 F.2d at 1054.
34 See WHD Opinion Letter Aug. 13, 1954
applying six factors very similar to the six economic realities factors currently used by courts of appeals.
35 WHD Opinion Letter FLSA795 Sept. 30, 1964.
36 See, e.g., WHD Opinion Letter, 2002 WL
32406602, at 2 Sept. 5, 2002; WHD Opinion Letter, 2000 WL 34444342, at 3 Dec. 7, 2000;
WHD Opinion Letter, 2000 WL 34444352, at 1 Jul.
5, 2000; WHD Opinion Letter, 1999 WL 1788137, at 1 Jul. 12, 1999; WHD Opinion Letter, 1995 WL
30 See
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