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Rules and Regulations
Federal Register Vol. 86, No. 86
Thursday, May 6, 2021

This section of the FEDERAL REGISTER
contains regulatory documents having general applicability and legal effect, most of which are keyed to and codified in the Code of Federal Regulations, which is published under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.

DEPARTMENT OF LABOR
Wage and Hour Division 29 CFR Parts 780, 788, and 795
RIN 1235AA34

Independent Contractor Status Under the Fair Labor Standards Act FLSA:
Withdrawal Wage and Hour Division, Department of Labor.
ACTION: Final rule; withdrawal.
AGENCY:

This action finalizes the Department of Labors proposal to withdraw the rule titled Independent Contractor Status under the Fair Labor Standards Act, which was published in the Federal Register on January 7, 2021.
DATES: As of May 6, 2021, the final rule published January 7, 2021 at 86 FR
1168, and delayed on March 7, 2021 at 86 FR 12535 is withdrawn.
FOR FURTHER INFORMATION CONTACT:
Amy DeBisschop, Division of Regulations, Legislation, and Interpretation, Wage and Hour Division, U.S. Department of Labor, Room S
3502, 200 Constitution Avenue NW, Washington, DC 20210; telephone: 202
6930406 this is not a toll-free number. Copies of this final rule may be obtained in alternative formats Large Print, Braille, Audio Tape or Disc, upon request, by calling 202 6930675 this is not a toll-free number. TTY/TDD
callers may dial toll-free 1877889
5627 to obtain information or request materials in alternative formats.
Questions of interpretation or enforcement of the agencys existing regulations may be directed to the nearest Wage and Hour Division WHD district office. Locate the nearest office by calling the WHDs tollfree help line at 866 4USWAGE 866
4879243 between 8 a.m. and 5 p.m. in your local time zone, or log onto WHDs website at https www.dol.gov/
agencies/whd/contact/local-offices for a
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nationwide listing of WHD district and area offices.
SUPPLEMENTARY INFORMATION:
I. Background A. Statutory and Legal Background The Fair Labor Standards Act FLSA or Act requires all covered employers to pay nonexempt employees at least the federal minimum wage for every hour worked in a non-overtime workweek.1 In an overtime workweek, for all hours worked in excess of 40 in a workweek, covered employers must pay a nonexempt employee at least one and one-half times the employees regular rate.2 The FLSA also requires covered employers to make, keep, and preserve certain records regarding employees.3
The FLSAs minimum wage and overtime pay requirements apply only to employees.4 Section 3e generally defines employee to mean any individual employed by an employer. 5
Section 3d of the Act defines employer to include any person acting directly or indirectly in the interest of an employer in relation to an employee. 6 Section 3g defines employ to include to suffer or permit to work. 7
The Supreme Court, in interpreting these definitions, has stated that a broader or more comprehensive coverage of employees within the stated categories would be difficult to frame, and that the term employee had been given the broadest definition that has ever been included in any one act. 8
The Supreme Court has further stated that the striking breadth of the FLSAs definition of employto suffer or permit to workstretches the meaning of employee to cover some parties who might not qualify as such under a strict application of traditional agency law principles. 9 Thus, the FLSA expressly rejects the common law 1 29

U.S.C. 206a.
U.S.C. 207a.
3 29 U.S.C. 211c.
4 See 29 U.S.C. 206 minimum wage and 207
overtime pay.
5 29 U.S.C. 203e1.
6 29 U.S.C. 203d.
7 29 U.S.C. 203g.
8 United States v. Rosenwasser, 323 U.S. 360, 362, 363 n.3 1945 quoting 81 Cong. Rec. 7657
statement of Senator Black.
9 Nationwide Mut. Ins. v. Darden, 503 U.S. 318, 326 1992.
2 29

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standard for determining whether a worker is an employee.10
Though the FLSAs definition of employee is broader than the common law definition, the Supreme Court has also recognized that the Act was not intended to stamp all persons as employees. 11 The Supreme Court has acknowledged that even a broad definition of employee does not mean that all who render service to an industry are employees. 12 One category of workers that has been recognized as being outside the FLSAs broad definition of employees is independent contractors. 13 Courts have thus recognized a need to delineate between employees, who fall under the protections of the FLSA, and independent contractors, who do not.
The Supreme Court has repeatedly emphasized that the test for whether an individual is an employee under the FLSA is one of economic reality. 14
Under this test, the technical concepts used to label a worker as an employee or independent contractor do not drive the analysis, but rather it is the economic realities of the relationship between the worker and the employer that is determinative.15
In United States v. Silk, 331 U.S. 704, 712 1947, an early case applying an economic realities test under the Social Security Act, the Supreme Court acknowledged that probably it is quite impossible to extract from the statute a rule of thumb regarding the 10 See id.; Walling v. Portland Terminal Co., 330
U.S. 148, 15051 1947 But in determining who are employees under the Act, common law employee categories or employer-employee classifications under other statutes are not of controlling significance. This Act contains its own definitions, comprehensive enough to require its application to many persons and working relationships, which prior to this Act, were not deemed to fall within an employer-employee category. citation omitted.
11 Portland Terminal, 330 U.S. at 152; see also Rutherford Food Corp. v. McComb, 331 U.S. 722, 729 1947 workers may not be employees when their work does not in its essence . . . follow the usual path of an employee.
12 United States v. Silk, 331 U.S. 704, 712 1947
analyzing the definition of employee under the Social Security Act.
13 Rutherford Food, 331 U.S. at 729 There may be independent contractors who take part in production or distribution who would alone be responsible for the wages and hours of their own employees..
14 Tony & Susan Alamo Found. v. Secy of Labor, 471 U.S. 290, 301 1985 quoting Goldberg v.
Whitaker House Coop., Inc., 366 U.S. 28, 33 1961.
15 Goldberg, 366 U.S. at 3233.

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