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Federal Register / Vol. 86, No. 86 / Thursday, May 6, 2021 / Rules and Regulations supported the elevation of two core factors because it would improve clarity. Cambridge Investment Research, for instance, stated that the enhanced focus on the two core factors elucidates the test review process, reduces inaccurate classifications and decreases associated litigation, and the Center for Workplace Compliance agreed that the use of two core factors would simplify the analysis. The Texas Policy Foundation similarly commented that rather than analyzing a nonexhaustive list of six factors, the Independent Contractor Rule allows employers to focus on two core factors regarding how workers should be classified.
After careful consideration of the comments received, the Department believes that elevating two factors of the multifactor economic realities analysis above all others is in conflict with the Act, congressional intent, and longstanding judicial precedent. The Department and courts recognize, as they have since the Acts inception, that the cornerstone of the FLSA is the Acts broad definition of employ, which provides that an employee under the Act includes any individual whom an employer suffers, permits, or otherwise employs to work.99 Rather than being derived from the common law of agency, the FLSAs definition of employ and its suffer or permit language originally came from state laws regulating child labor.100 This standard was intended to expand coverage beyond employers who control the means and manner of performance to include entities who suffer or permit work.101 The FLSAs breadth in defining the employment relationship, as well as its clear remedial purpose, comes from the statutory text itself as well as the legislative history.102 This standard 99 See
29 U.S.C. 203e1, g.
Rutherford Food, 331 U.S. at 728 & n.7.
101 See generally People ex rel. Price v. Sheffield Farms-Slawson-Decker Co., 225 N.Y. 25, 2931
N.Y. 1918.
102 See 29 U.S.C. 202, 203e1, g; Rosenwasser, 323 U.S. at 362, 363 n.3 quoting statement of Senator Black from 81 Cong. Rec. 7657 that the term employee had been given the broadest definition that has ever been included in any one act ; see also, e.g., Parrish, 917 F.3d at 378
Given the remedial purposes of the FLSA, an expansive definition of employee has been adopted by the courts. citation omitted; Off Duty Police, 915 F.3d at 105455 noting, directly under the heading Employment Relationship, that the FLSA is a broadly remedial and humanitarian statute . . . designed to correct labor conditions detrimental to the maintenance of the minimum standard of living necessary for health, efficiency, and general well-being of workers
quoting Donovan v. Brandel, 736 F.2d 1114, 1116
6th Cir. 1984 some internal quotation marks omitted. The FLSAs broad scope of employment,
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stretches the meaning of employee under the FLSA to cover some parties who might not qualify as such under a strict application of traditional agency law principles. 103 The FLSAs overarching inquiry of economic dependence thus establishes a broader scope of employment than that which exists under the common law of agency and evinces Congresss intent to protect all covered workers from substandard wages and oppressive working hours. 104 Altering the focus of this analysis to two core factors particularly the control factor, as discussed belowrisks excluding or misclassifying workers whose FLSA
employment status is established under other facts that demonstrate that they are economically dependent on an employer and not in business for themselves.
Moreover, upon further review of the case law, the Department is not aware of any court that has, as a general and fixed rule, elevated a subset of the economic realities factors above the other factors in all cases, and there is no clear statutory basis for such a predetermined weighting of the factors.
Rather, the Department is cognizant of the voluminous case law that emphasizes that it is impossible to assign to each of these factors a specific and invariably applied weight. 105
Undeniably, courts have refused to assign universal and predetermined weights to certain factors; rather, courts stress that the analysis must consider the totality of the circumstances and broader than the common law, was not changed by the Supreme Courts decision in Encino Motorcars, LLC v. Navarro, 138 S. Ct. 1134 2018, which explained that the Acts statutory exemptions should be interpreted fairly because there is no textual indication that the exemptions should be construed narrowly. See 138 S. Ct. at 1142. Here, the Acts definition of employ as including to suffer or permit to work gives a clear textual basis for the breadth of employment under the FLSA. 29
U.S.C. 203g; see Off Duty Police, 915 F.3d at 1062
These economic reality factors must be balanced in light of the FLSAs strikingly broad definition of employee. quotations and citation omitted.
103 Darden, 503 U.S. at 326; see also Portland Terminal, 330 U.S. at 150 in determining employee status under the FLSA, common law employee categories or employer-employee classifications under other statutes are not of controlling significance.
104 Barrentine v. Arkansas-Best Freight Sys., Inc., 450 U.S. 728, 739 1981.
105 Parrish, 917 F.3d at 380 quoting Hickey v.
Arkla Indus., Inc., 699 F.2d 748, 752 5th Cir.
1983; see also Scantland, 721 F.3d at 1312 n.2
observing that the relative weight of each factor depends on the facts of the case; Silk, 331 U.S.
at 716 rejecting a rule of thumb to define the limits of the employer-employee relationship immediately before providing an incomplete list of factors considered important for decision.

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neither the presence nor absence of any particular factor is dispositive.106
Regarding the Departments review of certain appellate case law in the Rule discussed by some commenters, the Department believes that upon further consideration, this summary of appellate case law is incomplete, oversimplifies the analysis provided by the courts, and makes assumptions about the reasoning behind the courts decisions that are not necessarily clear from the decisions themselves.107 The Rules discussion of the review was incomplete because the Department did not provide full documentation or citations for its case law review. In addition, it was not made clear in the Rule what the scope of the review entailed e.g., whether it included only published circuit court decisions or all cases, whether it included cases that were simply remanded to the district court for any reason, etc..108 The review oversimplified the analysis provided by the courts because court decisions regarding classification under the FLSA
often emphasize the fact-specific nature of the totality of circumstances analysis and do not parse out each factor like a 106 See Razak, 951 F.3d at 143 citing DialAmerica Mktg., 757 F.2d at 1382; see also McFeeley, 825 F.3d at 241 While a six-factor test may lack the virtue of providing definitive guidance to those affected, it allows for flexible application to the myriad different working relationships that exist in the national economy. In other words, the court must adapt its analysis to the particular working relationship, the particular workplace, and the particular industry in each FLSA case.;
Ellington v. City of East Cleveland, 689 F.3d 549, 555 6th Cir. 2012 This economic reality standard, however, is not a precise test susceptible to formulaic application. . . . It prescribes a caseby-case approach, whereby the court considers the circumstances of the whole business activity.
quoting Brandel, 736 F.2d at 1116; Morrison v.
Intl Programs Consortium, Inc., 253 F.3d 5, 11 D.C.
Cir. 2001 No one factor standing alone is dispositive and courts are directed to look at the totality of the circumstances and consider any relevant evidence.; Superior Care, 840 F.2d at 1059 No one of these factors is dispositive; rather, the test is based on a totality of the circumstances. . . . Since the test concerns the totality of the circumstances, any relevant evidence may be considered, and mechanical application of the test is to be avoided.; Lauritzen, 835 F.2d at 1534 Certain criteria have been developed to assist in determining the true nature of the relationship, but no criterion is by itself, or by its absence, dispositive or controlling.; Hickey, 699
F.2d at 752 It is impossible to assign to each of these factors a specific and invariably applied weight.; Usery, 527 F.2d at 131112 No one of these considerations can become the final determinant, nor can the collective answers to all of the inquiries produce a resolution which submerges consideration of the dominant factor economic dependence..
107 See 86 FR 119698.
108 See 86 FR 1198 stating among the appellate decisions since 1975 that the Department reviewed . . . and thus indicating that the universe may have been limited in some capacity that is not noted in the Rule.

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