DOL Concludes Certain Service Providers For Tech Companies Are Independent Contractors Featured

  30 April 2019

The U.S. Department of Labor (DOL) announced that it has issued a new opinion letter that addresses whether a service provider for a virtual marketplace company (“Gig” worker) is an employee of the company or an independent contractor under the FLSA. 

The DOL concludes that workers who provide services to consumers through the specific company's virtual platform are independent contractors, not employees of the company. To make this determination, the DOL applied its six-factor balancing test, derived from Supreme Court precedent, which considers:

·      The nature and degree of the potential employer's control;

·      The permanency of the worker's relationship with the potential employer;

·      The amount of the worker's investment in facilities, equipment, or helpers;

·      The amount of skill, initiative, judgment, or foresight required for the worker's services;

·      The worker's opportunities for profit or loss; and

·      The extent of integration of the worker's services into the potential employer's business.



In the DOL’s announcement regarding the opinion letter, the DOL stated that “the opinion letter is an official, written opinion by the Department's Wage and Hour Division (WHD) on how a particular law applies in specific circumstances presented by the individual person or entity that requested the letter.”Read more here.