However, the DOL’s recent policy change has a direct effect on independent flooring retailers, especially those who depend on installers considered as independent contractors. Going back to the 2008 standard shapes how the DOL enforces the FLSA. Getting the classification wrong can lead to serious legal and financial consequences, including owed back wages and penalties. Nevertheless, this change is somewhat limited: the more employee-friendly 2024 test will continue to be used in private lawsuits “until further action is taken.” The Economic Realities Test: What It Means for Flooring Retailers and Installers The DOL’s reinstated 2008 test evaluates whether a worker is economically dependent on the business. It considers seven factors:
1. Integral nature of the work : Is flooring installation central to your business? 2. Permanency of the relationship : Do you regularly use the same installers? 3. Investment in tools and equipment: Do installers bring their own gear? 4. Control over work : Who sets the schedule and supervises the job? 5. Opportunity for profit or loss : Can installers earn more through their business decisions?
Premier Flooring Retailer tise | 2026 19 The 2024 test (which continues to apply in lawsuits brought by putative employees) is more employee-friendly for several reasons. The 2024 rule’s totality-of-the-circumstances approach emphasizes the worker’s economic dependence on the employer. It also offers a more detailed analysis and specific questions for each factor; the 2008 test’s lack of detail gives employers more opportunity to contest a misclassification. “ For flooring retailers, getting worker classification wrong can trigger serious legal and financial consequences—even when everyone thinks they’re doing it right.” 6. Initiative and judgment : Do installers compete in an open market? 7. Independent business operation : Do they market their services to others? If installers are economically dependent on your business, they may be considered employees— even if a contract labels them as independent contractors.
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