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Federal Register / Vol. 86, No. 86 / Thursday, May 6, 2021 / Rules and Regulations whether a worker is an employee or independent contractor.

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2. The Role of Control in the Rules Analysis As explained above, the Independent Contractor Rule would have identified the nature and degree of control over the work as one of the two core factors meant to carry greater weight in the analysis. 118 According to the Rule, review of case law indicates that courts of appeals have effectively been affording the control and opportunity factors greater weight, even if they did not always explicitly acknowledge doing so. 119 The Rule addressed and rejected comments which opined that focusing the analysis on two core factorsone of which would be controlwould narrow the analysis to a common law control test.120
In the proposal to withdraw the Independent Contractor Rule, the Department expressed concern that significant legal and policy implications could result from making control one of only two factors that would be ascribed greater weight and cited several Supreme Court decisions stating that the FLSAs definition of employ means that the scope of employment under the Act is broader than under a common law control i.e., agency analysis.121 The Department questioned whether, in light of this Supreme Court directive, the outsizedeven if not exclusiverole that control would have if the Rules analysis were to apply may be contrary to the Acts text and case law. 122
Several commenters who supported the proposed withdrawal of the Rule compared, and even equated, the Rules elevation of control as a core factor with the adoption of a common law control test, a test which is inconsistent with the FLSAs suffer or permit standard. For example, AFSCME stated that, by elevating consideration of dayto-day control as near-determinative, rather than one coequal factor among six, the Department has formulated a standard aligned with, and possibly more restrictive than, the common law employment test. The State Officials asserted that the Independent Contractor Rule was wrong not only to elevate any one relevant factor over 118 See 86 FR 124647 795.105d1. The workers opportunity for profit or loss would have been the other core factor.
119 Id. at 1198 citing 85 FR 60619.
120 See id. at 120001.
121 86 FR 14033 citing 29 U.S.C. 203g; Darden, 503 U.S. at 326; Portland Terminal, 330 U.S. at 15051; Rutherford Food, 331 U.S. at 728;
Rosenwasser, 323 U.S. at 36263.
122 Id.

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another in an assessment of a workers economic reality, but also to elevate control in particular because the FLSA uses an intentionally broad definition of employment, which expands the statutes protections to a class of workers greater than just those who would satisfy a common law understanding of employment based largely on the degree of control. They added that the Rules emphasis on control reverts back to the common law standard and that this, too, requires withdrawal of the Rule. See also AFLCIO Despite . . . clear Supreme Court instructions to construe the definition of employee in the FLSA
more broadly than under the common law . . . , the Rule effectively collapses the FLSAs definition into the common law definition by giving primacy and controlling weight to the two factors of control and opportunity for profit and loss.; Representative Scott, et al. Giving the control factor outsized weight under the Rules test is in direct conflict with congressional intent..
Many commenters who opposed the proposed withdrawal of the Rule expressed general support for elevating control as a core factor along with opportunity for profit or loss. For example, Capital Investment Companies stated that the Rule properly focuses on the control over the working relationship and the financial aspects of the relationship. The Intermodal Association of North America commended the Rules adoption of a revised economic reality test, with a focus on the nature and degree of the workers control over their work and the workers opportunity for profit or loss.
Commenters who opposed the Rules proposed withdrawal generally did not express concerns with elevating control as one of two core factors for determining employee or independent contractor status.
As an initial matter and as explained above, it is not legally supportable to elevate in a predetermined and universal manner two factors above the others. Moreover, having considered the issue and the comments received, it is the Departments position that, in particular, elevating control is contrary to the FLSAs text and its particular scope of employment. As noted, the FLSA defines employ to include to suffer or permit to work. 123 The Supreme Court has explained that this FLSA definition was a rejection of the common law control standard for determining who is an employee under 123 29

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the Act in favor of a broader scope of coverage.124
Although the Rules test was not the same as the common law control test, the Rules mandate that control have such an elevated role in every FLSA
employee or independent contractor analysis brought the Rule too close to the common law test that the Act squarely rejects. Accordingly, the outsized role that control would have played in the analysis supports withdrawing the Rule.
3. The Rules Narrowing of Several Factors In its proposal to withdraw the Independent Contractor Rule, the Department expressed concern that the ways in which the Rule would have redefined certain factors would improperly narrow the application of the economic realities test.125 The Department identified four examples of such narrowing: 1 Making the opportunity for profit or loss factor indicate independent contractor status based on the workers initiative or investment; 2 disregarding the employers investments; 3 disregarding the importance or centrality of a workers work to the employers business; and 4 downplaying the employers right or authority to control the worker.126 In each of these ways, the Rule would have narrowed the scope of facts and considerations comprising the analysis of whether the worker is an employee or independent contractor, eliminating several facts and concepts that have deep roots in both the courts and WHDs application of the analysis.127 Moreover, the Department expressed concern that, as a policy matter, the Rules narrowing of the analysis would result in more workers being classified as independent contractors not entitled to the FLSAs protections, contrary to the Acts 124 See Darden, 503 U.S. at 326 The FLSA . . .
defines the verb employ expansively and with striking breadth that stretches the meaning of employee to cover some parties who might not qualify as such under a strict application of traditional agency law principles. citations omitted; Portland Terminal, 330 U.S. at 15051
But in determining who are employees under the Act, common law employee categories or employeremployee 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. citations omitted; see also Rutherford Food, 331 U.S. at 728 The definition of employ is broad.; Rosenwasser, 323 U.S. at 36263 A
broader or more comprehensive coverage of employees . . . would be difficult to frame..
125 See 86 FR 1403334.
126 See id.
127 See id. at 14034.

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