Episode Details

Daniel Moore, CPA, Owner — D.T. Moore and Company, LLC, discusses the recent Department of Labor rule on determining the classification of workers as either employees or independent contractors under the Fair Labor Standards Act. He also highlights the potential legal and financial risks associated with worker misclassification.

The rule, effective on March 11, 2024, aims to align with judicial precedents, reduce misclassification risks and offer more flexibility for businesses engaging with independent contractors.

Factors for worker classification under this rule are:

• Opportunity for profit or loss that a worker might have
• Investments of resources by the worker and potential employer
• Degree of permanence of the work relationship
• Nature and degree of control an employer has over the work
• Extent to which the work is integral to the employer's business
• Skill and initiative of the worker

Dan highlights the importance of considering both IRS and Department of Labor rules when advising clients on worker classification and how to best communicate this change to clients.

AICPA resources

· Tax season resource center — Access the AICPA's central hub for guidance, tools and developments throughout the tax filing season.

· Employee or independent contractor? DOL issues new guidance, Journal of Accountancy, Jan. 10, 2024

Other resources

· RIN 1235-AA43 published in the Federal Register — Department of Labor (DOL) rule

Transcript

April Walker: On today's podcast, listen to hear more about a recent Department of Labor rule that talks about independent contractors and employees.

Hello, everyone, and welcome to the AICPA's Tax Section Odyssey podcast, where we offer thought leadership o