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Because it’s typically trumped by the core factors, the proposed regulation gives much less weight to the permanence of the connection. In summary, every of the two core components is, by itself, extremely probative of a employee’s financial dependence. The Department and courts exterior of the Fifth Circuit have sometimes articulated the sixth issue of the financial actuality test as “the extent to which services rendered are an integral part of the [potential employer’s] enterprise.” WHD Fact Sheet #13. Under this articulation, the “integral half” issue considers “the significance of the providers rendered to the company’s business.” McFeeley, 825 F.3d at 244.

Additionally, revising the Department’s guidance to provide extra clarity could promote innovation and certainty in enterprise relationships. Independent contractors might have a better tax liability than workers, as they are legally obligated to pay each the worker and employer shares of the Federal Insurance Contributions Act (FICA) taxes. However, economists recognize that payroll taxes generally are subtracted from the wage fee of workers. Employers additionally cowl unemployment insurance coverage and workers’ compensation taxes for his or her workers. These prices are also parts of businesses’ worker prices, and employee wages are anticipated to reflect that accordingly.

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