As previously promised, the Department of Labor today issued its eighth Administrator’s Interpretation (“AI”) since the 2010 implementation of this form of guidance. Today’s Interpretation, as expected, reflects the current Department’s position that the governing analysis is the economic realities test which, in the Department’s view, is used to determine “whether the worker is economically dependent on the employer” rather than the full “economic realities” of the parties’ arrangement. Unsurprisingly, under this analysis the Department expresses its view that “most workers are employees under the FLSA.” DOL Administrator’s Interpretation No. 2015-1 (July 15, 2015). This view is consistent with the position expressed by DOL at the agency level in its investigations. The balance of the fifteen-page AI discusses the factors that should be used in applying the “economic realities” test and provides examples of workers who satisfy and fail to satisfy each factor, collecting case law finding workers to be employees under the FLSA.

Unlike the AI in which the Department interpreted the applicability of its own regulations to loan officers, recently reviewed by the Supreme Court, this new Interpretation concerns an interpretation of definitions contained in the FLSA itself. What deference, if any, courts will give to this new interpretation remains to be seen, as the AI does not identify any particular expertise the DOL possesses and employed in assessing the various factors. One obvious distinction between “economic realities” and “economic dependence” is the attempt through the latter – consistent with Wage Hour Administrator Weil’s approach to wage issues – to move away from a legal test focused on the putative employer’s control over the worker to a purely economic test focused solely on the relative bargaining power of the parties. The AI does send a strong signal that the DOL will look skeptically on any claim of independent contractor status.

This latest guidance regarding DOL’s position serves as another reminder that all employers should carefully examine the facts and circumstances behind classification of service providers as contractors.