Misclassification Mythbusters 



The United States Department of Labor (DOL) offers 12 “myths” and attempts to provide the facts to correct these myths.  Richard J. Reibstein has correctly criticized the DOL facts as oversimplifications in “Misclassification Mythbusters”: The Labor Department’s Latest Effort to Crack Down on Independent Contractor Misclassification | Pepper Hamilton LLP – JDSupra

The DOL Mythbusters provides a helpful chart with links to other resources:


Law:Benefits, Protections and Employer Requirements:More Information:
Fair Labor Standards Act (FLSA)
  • Minimum wage
  • Overtime pay

The FLSA also requires employers to keep employment records.

The FLSA’s definition of employment was designed to be broad and provide expansive coverage for workers. As a result, most workers are employees under the FLSA.

For more information, visit the FLSA Overview page and the DOL Misclassification Initiative page.

Migrant and Seasonal Agricultural Worker Protection Act (MSPA)
  • Wages
  • Safe housing and transportation
  • Disclosure about the employment

MSPA uses the same broad definition of employment as the FLSA.

For more information, visit the MSPA website and the DOL Misclassification Initiative page.

Family and Medical Leave Act (FMLA)
  • Up to 12 weeks of unpaid, job-protected leave for family and medical reasons
  • Continuation of health insurance when employees take FMLA leave

The FMLA uses the same broad definition of employment as the FLSA but has additional eligibility requirements in order for employees to be entitled to job-protected leave.

For more information about FMLA, visit the FMLA Overview page and the DOL Misclassification Initiative page.

State Workers’ Compensation Laws
  • Workers’ compensation if you are injured on the job
The employment status of workers who are injured while employed by private companies or by state and local governments is determined by each state’s workers’ compensation board.
Internal Revenue Code
  • Income tax withholding
  • Withholding and payment of Social Security taxes and Medicare taxes

The federal tax rules generally focus on the work relationship that exists between the worker and employer and whether the employer has the right to control how work is done, looking at many facts and circumstances.

Please visit the Internal Revenue Service’s “Independent Contractor versus Employee” page to learn more.

State Unemployment Insurance Laws
  • Unemployment insurance (UI) if you are laid off or otherwise separated due to non-disqualifying reasons and meet other eligibility requirements

Each state UI law presumes a worker is an employee unless certain tests in each state’s UI law are passed to show that the worker is an independent contractor. The tests in each state differ slightly; however, the tests generally examine the direction and control exercised by the employer over the service performed and whether the worker is customarily engaged in an independent business.

Information and contacts for state UI agencies is available here

See all the myths and and the chart at Misclassification Mythbusters – Wage and Hour Division (WHD) – U.S. Department of Labor

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