Independent Contractor Classification

Gig-Worker Classification Under the Six-Factor Economic-Reality Test

The operative test lives at 29 C.F.R. § 795.110: six factors that "are tools or guides to conduct a totality-of-the-circumstances analysis," where "no one factor or subset of factors is necessarily dispositive, and the weight to give each factor may depend on the facts and circumstances of the particular relationship." The control factor was written with platforms in mind — it counts "reserved control" and asks "whether the potential employer uses technological means to supervise the performance of the work (such as by means of a device or electronically) . . . or places demands or restrictions on workers that do not allow them to work for others or work when they choose." Direct attacks on the rule, meanwhile, keep failing at the threshold. Dismissing freelance writers’ APA and nondelegation claims, Littman v. United States Department Labor, No. 3:24-cv-00194 (M.D. Tenn. Mar 10, 2025) held that "Plaintiffs do not have Article III standing to challenge the 2024 Rule": "[i]f anything, the 2024 Rule directly regulates employers because it speaks directly to how employers should conduct their business," and courts "refuse to ‘endorse standing theories that rest on speculation about the decisions of independent actors, particularly speculation about future unlawful conduct.’" The freelancers could not show that clients "took harmful actions . . . because of 2024 Rule’s six-factor test, as opposed to other reasons unrelated to the 2024 Rule."

On the merits, the fullest recent circuit treatment revived insurance adjusters’ overtime claims at summary judgment. Joel Galarza, et al v. One Call Claims, LLC, et al, 156 F.4th 1156 (11th Cir. 2025) runs the same six-factor framework and is blunt about paperwork: "True to the name, we care about reality, not possibility. That is, the relationship is not determined by the ‘label’ the parties use," or "how one could have acted under the contract" — "we focus on how the parties actually behaved." Control matters when "it reveals that the alleged employee does not stand as a ‘separate economic entity’ who is ‘in business for [itself],’" including "whether the alleged employer controlled how much the workers were paid, how many hours they worked, how many days they worked, their daily work schedule, and if they could work for others." Profit-or-loss asks whether workers can "earn additional income through their own initiative"; earning more by being "more technically proficient" "does not speak to their economic independence." And "the investment factor considers the cost of ‘equipment or materials’ or ‘employment of workers,’ not all costs associated with a profession" — license fees, dues, and car expenses did not make the adjusters entrepreneurs.

The Ninth Circuit adds a warning about what happens after a misclassified worker sues. Hollis v. R&r Restaurants, Inc, et al., No. 24-2464 (9th Cir. Nov 18, 2025) restated the touchstone — "employees are those who as a matter of economic reality are dependent upon the business to which they render service," and "[o]nly economic realities determine employee status, not the intent of the parties or contractual characterizations" — then held that cutting a plaintiff off to contain the lawsuit is independently actionable: "FLSA-covered employers cannot take adverse actions against FLSA plaintiffs and then avoid retaliation liability by explaining those actions as attempts to limit legal exposure created by their alleged violations of the Act. In other words, a financial interest in minimizing liability does not justify bald retaliation." The net is wide, because "[t]he defendant in an FLSA retaliation action need not be the actual employer and the plaintiff need not have been employed by the actual employer when the retaliation occurred."

For counseling an app-based workforce, the regulatory and judicial tests now ask the same questions, so answer them together: does the platform supervise through the app, set rates unilaterally, or restrict multi-apping (control); can workers grow earnings through business judgment rather than more hours (profit or loss); and is their spending entrepreneurial capital or just costs the company shifted onto them (investment)? Contract labels, 1099s, and signed acknowledgments carry no weight anywhere in the analysis. Because challenges to the 2024 rule keep dying on standing, Part 795 remains the enforcement baseline — and deactivating or reclassifying workers who assert FLSA rights creates a separate retaliation claim on top of the classification exposure.