The distinction is important to both businesses and workers. Under the Fair Labor Standards Act, employees are entitled to minimum wage, overtime pay and other benefits. Independent contractors are not entitled to such benefits, but they generally have more flexibility to set their own schedules and work for multiple companies. The factors typically considered when making this distinction include:

The employer's versus the individual's degree of control over the work;
The individual's opportunity for profit or loss;
The individual's investment in facilities and equipment;
The permanency of the relationship between the parties;
The skill or expertise required by the individual; and
Whether the work is "part of an integrated unit of production."

The Texas decision hinged on procedure rather than the merits of the rule. Judge Marcia Crone sided with the Coalition for Workforce Innovation, a group that represents Uber, Lyft and other gig-economy businesses that rely on an independent-contractor business model. Along with several other business groups, the coalition sued the Labor Department, claiming that the Biden administration failed to engage in a proper notice-and-comment period as required.

Instant Insights /

Judge rules in favor of Trump administration worker classification rule -- for now

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