The U.S. Department of Labor has issued a new final rule to clarify the differences between employees and independent contractors under the Fair Labor Standards Act (FLSA). This rule is intended to make these distinctions clearer by providing guidance based on economic realities, which consider factors like a worker’s control over their work and the potential for profit or loss. Two main factors, related to control and profit potential, are seen as more significant in determining a worker's status. The rule aims to increase predictability for both workers and businesses across all industries.
Simple Explanation
Imagine the U.S. Department of Labor wrote a new rule that helps people understand whether they are more like a "helper" (employee) or a "partner" (independent contractor) when they work. This new idea looks at how much control someone has over their work and if they can make their own money decisions, to make things clearer and less confusing for everyone.