Are you running a business, hiring freelancers, or working as one yourself? You may want to pay attention because on May 1st, the Department of Labor (“DOL”) changed the rule, again, for who counts as an “independent contractor.” 

In a May 1st memo, the DOL stated it is no longer following its own 2024 rulebook when deciding how one is classified as an independent contractor versus an employee. The 2024 test required courts to look at two factors: 

1. How the business controls the employee’s work (how much the business directs the worker); and 
2. If the worker can make (or lose) money based on their own decisions (or, to put it another way: does the worker have opportunity for profit or loss?) 

Instead of following the 2024 rules, DOL investigators will revert to using the 2008 “economic reality” test. Instead of two, this test has seven factors, which include but are not limited to questions like: 

• Is the worker’s role central to the business? 
• Do they work there long-term? 
• Who controls how the work gets done? 
• Did the worker invest in their own tools or equipment? 
• Can they make a profit, or suffer a loss, based on how they work?
• Does the worker need entrepreneurial skill to succeed at the job?
• Is the worker's business their own, or an extension of their employer's?

So, what does this mean for you? 

It means no one factor decides the issue; just calling someone a “contractor” in a written agreement doesn’t and never cut it. But here’s the twist: the 2024 rule is still in effect for private litigation. So, if an employee sues a business, courts might still apply the newer framework. On the other hand, if the DOL comes calling instead of a private employee, courts will use the 2008 test.  

For now, businesses should tread carefully. Abiding by two separate standards can be difficult; one can imagine, for example, that one court could decide that a worker is an employee under the 2008 test, but another court determines the same worker is an independent contractor under the 2024 rule. The rules got fuzzier, and the risks grew larger. Misclassifying employees and contractors can have major consequences: unpaid wages, liquidated damages, lawsuits, and more.

So, what’s your take? Should “employee versus independent contractor” classification hinge on a set checklist? Or is a flexible, case-by-case approach the better path? 

Effective June 19, 2025, the New York State Fashion Workers Act, A05631E, will protect New York's 180,000 fashion industry professionals--models, influencers, photographers, and stylists--from their management company's exploitation through unfair pay, sexual abuse, harassment, and discrimination.

Now, victims can bring a new lawsuit for experiencing unsafe working conditions, exploitative contracts, delayed payments, and abuse where they can collect liquidated damages (double to three times damages) and attorneys' fees. 

The Act Requires:

• A zero tolerance policy for abuse, harassment, or other forms of inappropriate behavior
• Models to receive copies of the final agreement that has been negotiated 
• Overtime payments of at least 50% higher than contracted hourly rate for work exceeding 8 hours in a 24 hour period 
• Meal breaks for jobs over 8 hours
• Liability insurance for models’ health and safety
• Management agencies commission is capped 20%
• Management agencies must utilize transparent contracts & provide copies to models
• Clear consent for the use of digital replicas
• Modeling agencies to register with the State of New York to operate

These new lawsuits are designed to close a loophole that modeling agencies have utilized to escape licensing & regulation by considering themselves management companies, rather than talent agencies, under New York State General Business Law § 171(8), known as the "incidental booking exception." 

The Department of Labor (DOL) announced that on March 11, 2024, a new rule, 89 FR 1638, will go into effect restoring the multifactor analysis used by courts for decades in determining if an individual is an employee or Independent Contractor (IC) under the Fair Labor Standards Act (FLSA). 

Misclassifying workers as ICs rather than employees can result in wage claims with liquidated damages and attorneys' fees under the FLSA, which can be catastrophic for business to continue to exist. Simply, you have to get it right and ICs that are misclassified have excellent cases because liquidated damages are two (2) times the amount not received. 

This new rule is being announced because DOL had concerns about the 2021 IC Rule where it did not fully align with the FLSA's text and purpose. 

The six factors under the New Rule are:

1. Opportunity for profit or loss
2. Financial stake and nature of resources invested in the work
3. Degree of permanence of the work relationship
4. Degree of control the employer has over the person’s work
5. Whether the work is essential to the employer’s business
6. Worker’s skill and initiative

This new rule provides a consistent approach for conducting business with ICs and employes. 

You can read the Department of Labor's release on this new law here. You can read the final rule here. 

If you are interested in wage and hour claims, or better yet if you are a business owner or manager, you are going to want to read this. 

On October 13, 2022, the Department of Labor opened the comment period, which runs through November 28, 2022, for it's revised analysis to determine if an individual is an employee or an independent contractor for a wage and hour claim (i.e., misclassification claim). As a reminder, independent contractors are also known as self-employed workers and freelancers, and are considered to be in business for themselves and therefore, not entitled to minimum wages and overtime pay under the Fair Labor Standards Act (FLSA). 

However, if an employer gets this wrong, by considering an employee an independent contractor, tht employer can be subject to penalty, called liquidated damages, and more. It's a catastrophic mistake that really needs to be avoided at all costs. 

The Proposed Rulemaking is available here in full.

Comments can be made electronically at Federal eRulemaking Portal at https://www.regulations.gov.

In summary, the Proposed Rulemaking is attempting to reassert the Economic Reality Test, where "[t]he ultimate inquiry is whether, as a matter of economic reality, the worker is either economically dependent on the employer for work (and is thus an employee) or is in business for themself (and is thus an independent contractor)." In analyzing the test, the following, non-exclusive facts are generally examined, including: "the opportunity for profit or loss, investment, permanency, the degree of control by the employer over the worker, whether the work is an integral part of the employer's business, and skill and initiative." Under the Proposed Rulemaking, the Department of Labor will examine the factors in the Economic Reality Test by returned to a totality-of-the-circumstances analysis rather than focusing on core factors. No longer will two factors be considered most probative and carry greater weight. Now, all factors matter and should be analyzed when determining whether a worker is an independent contractor or an employee who is subject to rights under the FLSA. 

Is employment discrimination illegal?

Yes, discrimination in employment is illegal in the United States. Depending on the state you live in, there may be even greater protections, rights, and damages available to victims of workplace discrimination.

What qualifies as employment discrimination?

The laws enforced by the US Equal Employment Opportunity Commission (EEOC), and your individual state, entitle victims to sue for compensation in the event of unfair treatment based on their protected status or protected class.

While these vary from state-to-state, they may include the following: race, ethnic background, visible traits (hair texture, hairstyle, donning of religious garments or items), color, national origin, citizenship status, alienage status, immigration status, lawful source of income (subsidy recipient status), occupation, religion, creed, marital status, partnership status, sex, gender, sexual orientation, gender identity or expression (transgender status), domestic violence victim status, stalking victim status, sex offense victim status, familial status, pregnancy, presence of children, handicap (disability), age, military status, uniformed service, veteran status, first responder status, arrest record, and sealed conviction record.

Does discrimination have to be intentional to warrant compensation?

No. Regardless of whether the discrimination was unintentional or caused by implicit biases, you are entitled to fair compensation.

What is the most common workplace discrimination?

The most common types of discrimination in the workplace include racial discrimination, age discrimination, sex or gender discrimination, and disability discrimination.

Can an independent contractor sue for discrimination?

In many places, you can sue for workplace discrimination whether you are an employee, a domestic worker, or an independent contractor. If you are unsure of whether or not this applies in your state or locale, it’s best to consult with a skilled employment discrimination lawyer.

Who do workplace discrimination laws apply to? 

You have a right to compensation if you are discriminated against by anyone in the workplace. This could include a boss, coworker, vendor, client, patron, temp agency, or franchisor. 

Where can discrimination occur?

While workplace discrimination often occurs in the office, it can happen anywhere—over a conference call, in a meeting, at a holiday party, or at a work lunch—so long as you were fulfilling your work responsibilities at the time of the discriminatory incident. 

How do I know if I have been discriminated against at work?

Federal and state laws prevent hiring managers from changing available compensation, rates of pay, hours, or availability of employment based on your protected class status. Wages must be substantially equal between genders and, in cities like New York City, wage transparency will be required when jobs are advertised.

If you have been treated unfairly in any of these ways, have been spoken to in a demeaning way, or have been subjected to offensive jokes or comments based on your protected class status, then you may have a case for workplace discrimination and should consider reaching out to an experienced New York discrimination lawyer.

Can I be fired for speaking out against discrimination?

Not legally, no. If you are speaking out against discrimination in the workplace, you are protected from retaliation. This is true regardless of whether you are speaking out for yourself or on behalf of someone else. If you or a loved one have been fired or treated unfairly for speaking out against discrimination at work, we would love to take on your case and ensure that you receive the compensation that you deserve. Give us a call.

Can you sue for workplace discrimination?

Yes. Not only is it possible to sue for workplace discrimination, but Lieb at Law, P.C. has helped countless individuals recover compensatory damages and punitive damages for the pain inflicted by this unlawful act. Workplace discrimination is a violation of your rights and should never be tolerated.

How long do I have to sue for workplace discrimination?

Typically, federal law requires that you make a filing within 300 days of the discrimination (this may be cut down to 180 days based on your state’s laws, or even to 3 months if you work in education in places like New York).  However, certain state law claims can be brought up to 3 years after the incident. So, you should call right away and let us determine if you still have time to bring your case. 

What can I recover if I sue for workplace discrimination?

Employment discrimination claims can result in very high awards because they are designed to compensate victims for lost back-pay, lost front-pay, and experiencing emotional distress / loss of dignity. Additionally, the law provides that victims can recover other forms of compensatory damages, punitive damages, and their attorneys’ fees. In fact, the perpetrator can lose their license (if licensed), be required to take trainings, and be ordered to stop their offensive behavior. There are fines and more. However, we are ethically required to advise you that our prior results do not guarantee a similar outcome. So, you should contact us today and get a tailored evaluation of your specific situation.