DOL’s independent contractor proposed rule syncs employee FMLA definition

The reason behind the addition

The DOL claimed that the FMLA regulation’s guidance for assessing employee or independent contractor status could be unclear if it didn’t make confirming edits.

The FMLA regulation defines “Employee” as having the same meaning as that term has under the FLSA and notes that it takes the “definition of ‘employ’ from the [FLSA].” Reference 29 CFR 825.102 and 825.105(a).

The FMLA regulation doesn’t, however, mention the factors used to distinguish between employees and independent contractors under the FLSA or advise how employers should weigh the factors. These factors have changed over the years.

Instead, the regulation explains generally that “courts have said that there is no definition that solves all problems as to the limitations of the employer-employee relationship.”

It further advises that “an employee, as distinguished from an independent contractor who is engaged in a business of his/her own, is one who ‘follows the usual path of an employee’ and is dependent on the business which he/ she serves.”

Although accurate in describing the overall analysis, employers could misinterpret it as suggesting that — unlike the FLSA — there is no set of factors for distinguishing between employees and independent contractors in FMLA cases.

The DOL didn’t intend to create or imply any discrepancy between the FMLA and FLSA when it added the language in the FMLA. It believes that adding cross-references to the FLSA would address this concern and provide useful guidance when determining whether a worker is an employee or independent contractor under the FMLA.

If the proposed rule is finalized, employers would benefit from the simplicity and certainty of having a single uniform standard for determining employee or independent contractor status under both laws that use the same relevant statutory definitions.

Key to remember: While employers wouldn’t see a major change, they would need to apply the FLSA’s employee or independent contractor analysis to the FMLA under a new proposed rule.