Scalambrino & Arnoff, LLP

105 West Madison Street, Suite 810, Chicago, Illinois 60602

805 Greenwood Street, Evanston, Illinois 60201

Employment Law Alerts

High Rise Buildings

FEDERAL – WHO IS AN INDEPENDENT CONTRACTOR?

We often have discussions with our clients as to whether it is truly appropriate to classify someone as an independent contractor, as opposed to an employee. Independent contractor relationships are the exception, rather than the rule. A variety of federal, state (i.e., for Illinois unemployment purposes, we use an ABC test) and common law theories apply to the classification, as often, they are inconsistent with one another.

Well, the United States Department of Labor (USDOL) continues to stir the inconsistency pot. Yesterday, it set forth the test we are to use to determine whether someone is an independent contractor or an employee for purposes of the Fair Labor Standards Act – in plain English, whether the individual is entitled to minimum wage and overtime for the services performed. The test is the “economic realities” test, and it considers the totality of the circumstances surrounding the following 6 factors:

(1) opportunity for profit or loss depending on managerial skill;
(2) investments by the worker and the potential employer;
(3) degree of permanence of the work relationship;
(4) nature and degree of control;
(5) extent to which the work performed is an integral part of the potential employer’s business; and
(6) skill and initiative.

Further information can be found at –
Frequently Asked Questions – Final Rule: Employee or Independent Contractor Classification Under the FLSA | U.S. Department of Labor (dol.gov)

The rule is effective March 11, 2024. There have already been lawsuits challenging the rule filed.

Now is the time to review your independent contractor relationships – despite what you or the individual want, are they properly classified? Remember, the default classification is employee,” and rightly so given the laws.

And of course, do not forget, as of January 1, 2024, any independent contractor relationships you enter into Illinois must be reduced in writing.


IILLINOIS – PAID TIME OFF FOR EMPLOYEES 

We are still waiting on final regulations from the Illinois Department of Labor and will keep you updated.  **UPDATE – JCAR (the entity that approves rules) is scheduled to consider the revised regulations on the Paid Leave Law on March 12.  We will keep you advised. 

 

 

ILLINOIS – CHANGES TO THE DAY LABOR & TEMPORARY STAFFING ACT

The lawsuit challenging certain portions of the law is proceeding.  The preliminary injunction hearing was conducted February 7, 2024.  Judge Durkin has not yet issued a ruling.  For more information, feel free to contact us.