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A U.S. Department of Labor final rule that is intended to encourage reclassification of certain independent contractors as employees under the Fair Labor Standards Act takes effect on March 11. With a change in status, former independent contractors will receive minimum wage and overtime pay protections. As employees, some workers may also become eligible for health care, paid leave and other benefits, and for workers’ compensation coverage in the event of a work-related injury or illness.
To determine employment status, the rule directs employers to consider these factors:
In addition to being subject to the new federal rule, covered employers are encouraged to review applicable state laws that apply to worker classifications to reduce their legal liability exposure risk.
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