FLSA2019-6 — Whether a service provider for a virtual marketplace company is an employee of the company under the FLSA or an independent contractor * This opinion letter is consistent with the Wage and Hour Division's current enforcement position as stated in Field Assistance Bulletin 2025-1 (May 1, 2025). The opinion letter was withdrawn on February 19, 2021 and superseded by the rule entitled Employee or Independent Contractor Classification Under the Fair Labor Standards Act, 89 Fed. Reg. 1638 – the legality of which is the subject of current litigation

U.S. Department of Labor Wage and Hour Division
Washington, D.C. 20210
FLSA2025-2
May 2, 2025
Dear Name*:
As you know, the Department of Labor’s Wage and Hour Division (WHD) issued Opinion Letter
FLSA2019-6 on April 29, 2019, in response to your request for an opinion letter regarding
whether service providers working for a virtual marketplace company are employees or
independent contractors under the Fair Labor Standards Act (FLSA). This opinion letter was
withdrawn on February 19, 2021.
We have further analyzed Opinion Letter FLSA2019-6. From today forward, this letter, which is
designated as Opinion Letter FLSA2025-2 (May 2, 2025) and reproduces below the verbatim
text of Opinion Letter FLSA2019-6, is an official statement of WHD policy and an official ruling
for purposes of the Portal-to-Portal Act, 29 U.S.C. § 259.
†

Sincerely,
Donald M. Harrison, III
Acting Administrator
Dear Na
me*:
This letter responds to your request for an opinion on whether service providers working for a
virtual marketplace company (VMC) are employees or independent contractors under the Fair
Labor Standards Act (FLSA). This opinion is based exclusively on the facts you have presented.
You represent that you do not seek this opinion for any party that the Wage and Hour Division
(WHD) is currently investigating or for use in any litigation that commenced prior to your
request.
†
From the period beginning February 19, 2021, through May 1, 2025, Opinion Letter
FLSA2019-6 may not be relied upon as an official statement of agency policy for purposes of the
Portal-to-Portal Act, 29 U.S.C. § 259.

BACKGROUND
You write on behalf of your client,
1
a virtual marketplace company that operates in the so-called
“on-demand” or “sharing” economy. Generally, a VMC is an online and/or smartphone-based
referral service that connects service providers to end-market consumers to provide a wide
variety of services, such as transportation, delivery, shopping, moving, cleaning, plumbing,
painting, and household services. VMCs help consumers to obtain these services with greater
efficiency—days, weeks, or months faster than they would outside the virtual marketplace.
VMCs accomplish this through a software platform called an analytic hierarchy process—a
technological structure for organizing data that uses objective criteria to match consumers to
service providers.
R
egarding your client specifically, before your client allows service providers to use your
platform, it requires them to provide certain basic information: the service provider’s name,
contact information, and social security number. Service providers must also self-certify their
experience and qualifications, complete a background check through an accredited third party,
and complete an identity check through a different vendor. Your client also requires them to
acknowledge and accept a terms of use agreement and a service agreement, which states that
your client provides only a platform for connecting providers with customers and disclaims any
employment relationship between your client and the service providers. Additionally, these
agreements state that only the service providers, and not your client, will provide services to
consumers in the virtual marketplace. The agreements also classify the service providers as
independent contractors.
Your client does not interview service providers or require them to undergo training. Once the
service providers begin to use its virtual platform, it provides them with information on how the
virtual marketplace works, such as tips on best practices through an online resource center, and
feedback from existing users (both consumers and service providers) on the level of service that
consumers generally expect. Your client does its entire onboarding process online and does not
require service providers to review any of these materials. Your client also allows service
providers to immediately begin providing work to customers once their account is activated and
does not require them to report to a physical office.
Your client’s platform consolidates information from a consumer’s service request (such as the
kind of service needed, location, and date and time) and provides that information to service
providers through its virtual platform. The platform also allows its service providers to
communicate with consumers—including through mobile app messaging or masked telephone
calls—to exchange details about the requested service, including adjustments to the scope, price,
or time. Your client allows service providers to arrange for repeat business with a consumer,
including future jobs outside the virtual marketplace.
Customers using your client’s platform pay service providers on a per job basis. Your client sets
default prices based on the region and scope of the service provider’s work and uses default price
tiers that correspond to the number and type of services being offered. It also allows its service
1
WHD draws the following background information from the representations that you make in your
letter.

providers to request (presumably from the customer) to charge different prices based on other
factors, including their work experience outside of the virtual marketplace. Finally, your client
issues its service providers Form 1099s reflecting their earnings through your client’s platform.
Your client’s service agreement allows service providers the right to, among other things: accept,
reject, or ignore any service opportunity on the virtual platform; determine whether to accept any
service opportunities at all; select service opportunities by time and place; determine the tools,
equipment, and materials needed to deliver their services; and hire assistants or personnel. Your
client’s agreement provides that it will not inspect a service provider’s work for quality or rate
the service provider’s performance. Your client does, however, let consumers rate its service
providers’ performance. Your client’s service agreement also allows service providers to provide
their services to consumers through other means, including competing VMC platforms.
Your client does not require a service provider to accept or complete a minimum number of
service opportunities. Your client designates a service provider as “inactive” if they have not
taken a job for a certain period of time, but inactive service providers can reactivate their account
with a telephone call or email. Your client also gives service providers the right to “multi-app”—
that is, to simultaneously acquire work on a competitor VMC platform in order to determine the
most desirable or profitable service opportunity available at any given time. Your client’s service
providers often make use of this ability to “multi-app.”
Your client’s service providers design their own schedules and determine exactly when, where,
and how much to work in the virtual marketplace. Few of them spend full-time hours providing
services through your client’s platform. Service providers may consider a variety of factors when
determining whether to accept work—such as, for example, fee amount, expected time, dynamic
pricing in effect, location, availability of parking, traffic, and access to additional consecutive
service opportunities—in order to maximize their profit or fit their work into their individual
schedules. Moreover, service providers may choose between more difficult jobs that are more
lucrative, and jobs with less revenue potential, according to their personal needs and profit
motives. However, if a service provider cancels an accepted service opportunity without

sufficient notice, your client will charge a cancellation fee on behalf of the consumer. Your client
collects these fees to maintain the integrity of its platform.
Your client does not impose requirements on how its service providers must perform their work,
such as what transportation route to take, the order in which to clean an apartment, or the make,
model, type, brand, source, or amount of their working materials. Your client is not present when
the service provider works and does not monitor, supervise, or control the particulars of that
work. Moreover, your client requires service providers to purchase, at their expense, all of their
own supplies and equipment. Your client does not reimburse them for operating expenses, such
as transportation costs, vehicles, professional certifications, or licensing.
Your client will seek to terminate its relationship only if a service provider who commits a
material breach, such as: inappropriate behavior toward a consumer or the VMC; fraud; repeated
canceling or rescheduling of service opportunities on short notice; or receiving an aggregate
consumer rating below a certain minimum threshold. Your client will initiate this termination
process only in these instances to maintain the integrity of its virtual marketplace.

GENERAL LEGAL PRINCIPLES
The FLSA applies to those workers whom the FLSA defines as “employees.” See 29 U.S.C. §§
206, 207. An “employee” is any individual whom an employer suffers, permits, or otherwise
employs to work. See 29 U.S.C. §§ 203(e)(1), (g). This definition is very broad, but it was
“obviously not intended to stamp all persons as employees.” Walling v. Portland Terminal Co.,
330 U.S. 148, 152 (1947). For example, independent contractors are not “employees.” See, e.g.,
Rutherford Food Corp. v. McComb, 331 U.S. 722, 729 (1947) (recognizing that workers may be
independent contractors when their work does not “in its essence ... follow[] the usual path of an
employee”).
Over its history, WHD has consistently applied an interpretation of “employee” that adheres to
the text of the FLSA and judicial precedent interpreting it:
An employee, as distinguished from a person who is engaged in business for
himself or herself, is one who, as a matter of economic reality, follows the usual
path of an employee and is dependent upon the business to which he or she
renders service. The employer-employee relationship under the FLSA is tested by
economic reality rather than technical concepts. It is not determined by common
law standards relating to master and servant.
WHD Opinion Letter, 2002 WL 32406602, at *2 (quotation marks omitted).
2
As reflected by this longstanding interpretation, the touchstone of employee versus independent
contractor status has long been “economic dependence.” See, e.g., Parrish v. Premier
Directional Drilling, L.P., 917 F.3d 369, 379–80 (5th Cir. 2019); Saleem v. Corp. Transp. Grp.,
Ltd., 854 F.3d 131, 138–40 (2d Cir. 2017); Keller v. Miri Microsystems LLC, 781 F.3d 799, 806–
07 (6th Cir. 2015). The Supreme Court has instructed that a worker’s “dependence” should be
assessed “in light of the purposes of the Act.” Bartels v. Birmingham, 332 U.S. 126, 130 (1947).
Thus, for example, as “broad” as the definitions of “employ” and “employee” are, “they cannot
be interpreted so as to make a person whose work serves only his own interest an employee of
another person who gives him aid and instruction.” Portland Terminal, 330 U.S. at 152; see also,
e.g., Tony & Susan Alamo Found. v. Sec. of Labor, 471 U.S. 290, 295 (1985) (“While the
statutory definition is exceedingly broad, ... it does have its limits.” (citation omitted));
Scantland v. Jeffry Knight, Inc., 721 F.3d 1308, 1311 (11th Cir. 2013) (“These ‘broad
definitions’ do not, however, bring ‘independent contractors’ within the FLSA’s ambit.”).
Whether a worker is economically dependent on a potential employer is a fact-specific inquiry
that is individualized to each worker. See Barrantine v. Arkansas-Best Freight Sys., Inc., 450
U.S. 728, 739 (1981). The inability of the worker to work on his or her own terms often suggests
dependence. See, e.g., Saleem, 854 F.3d at148; Scantland, 721 F.3d at 1312 (citing Usery v.
2
See, e.g., WHD Opinion Letter, 2000 WL 34444342, at *3 (Dec. 7, 2000); WHD Opinion Letter, 2000
WL 34444352, at *1 (Jul. 5, 2000); WHD Opinion Letter, 1999 WL 1788137, at *1 (Jul. 12, 1999); WHD
Opinion Letter, 1995 WL 1032489, at *1 (June 5, 1995); WHD Opinion Letter, 1995 WL 1032469, at *1
(Mar. 2, 1995); WHD Opinion Letter, 1986 WL 740454, at *1 (June 23, 1986); WHD Opinion Letter,
1986 WL 1171083, at *1 (Jan. 14, 1986); WHD Opinion Letter WH-476, 1978 WL 51437, at *2 (Oct. 19,
1978); WHD Opinion Letter WH-361, 1975 WL 40984, at *1 (Oct. 1, 1975).

Pilgrim Equip. Co., Inc., 527 F.2d 1308, 1311–12 (5th Cir. 1976)); see also Sec’y of Labor, U.S.
Dep’t of Labor v. Lauritzen, 835 F.2d 1529, 1542 (7th Cir. 1987) (“The usual argument that
workers are ‘dependent’ on employers ... is that they are immobile.”) (Easterbrook, J.,
concurring). Accordingly, independent contractors are often characterized by their ability to, for
example, regularly negotiate working conditions or simultaneously work for another business.
See Parrish, 917 F.3d at 387 (holding that work “on a ‘project-by-project basis’ ... counsels
heavily in favor of [independent contractor] status” (citation omitted)); Saleem, 854 F.3d at 141–
43 (holding that the ability to simultaneously “draw income through work for others,” such as by
working for a competitor, indicates “considerable independence”). When determining economic
dependence, WHD considers six factors derived from Supreme Court precedent:
(1)The nature and degree of the potential employer’s control;
(2)The permanency of the worker’s relationship with the potential employer;
(3)The amount of the worker’s investment in facilities, equipment, or helpers;
(4)The amount of skill, initiative, judgment, or foresight required for the worker’s
services;
(5)The worker’s opportunities for profit or loss; and
(6)The extent of integration of the worker’s services into the potential employer’s
business.
3
See Rutherford, 331 U.S. at 730; United States v. Silk, 331 U.S. 704, 716 (1947) (Social Security
Act case).
Other factors may also be relevant, and the appropriate weight to give to each factor depends on
the facts. See Silk, 331 U.S. at 716. Additionally, “the determination of [employee status] does
not depend on such isolated factors but rather upon the circumstances of the whole activity.”
Rutherford, 331 U.S. at 730. Therefore, WHD does not determine employee status by simply
counting factors, but by weighing these factors in order to answer the ultimate inquiry of whether
the worker is “engaged in business for himself or herself,” or “is dependent upon the business to
which he or she renders service.” WHD Opinion Letter, 2002 WL 32406602, at *2.
Control. The first factor is the nature and degree of the potential employer’s control. A business
may have control where it, for example, requires a worker to work exclusively for the business;
disavow working for or interacting with competitors during the working relationship; work
against the interests of a competitor; work inflexible shifts, achieve large quotas, or work long
hours, so that it is impracticable to work elsewhere; or otherwise face restrictions on or sanctions
for external economic conduct, among others. See, e.g., Saleem, 854 F.3d at 141–42 (collecting
cases finding that a business “relinquishes control” over a worker and thereby makes the worker
“less economically dependent” when it allows the worker “to work for its competitors” or “draw
income through work for others”); Pilgrim Equip., 527 F.2d at 1312 (noting control that causes a
worker to have “no viable economic status that can be traded to other ... companies,” such that
3
Encompassed within these factors is the worker’s degree of independent organization and operation.

the worker cannot operate as “a separate economic entity”); WHD Opinion Letter, 2000 WL
34444342, at *4 (Dec. 7, 2000) (finding “significant control” where the workers were “not
permitted to work for other businesses while ... in the company’s service”); cf. WHD Opinion
Letter, 2002 WL 32406602, at *3 (noting that employees generally work for only one employer,
sometimes using an “exclusive employment agreement”).
Permanency of relation. The second factor is the permanency of the worker’s relationship with
the potential employer. Permanence arises where a business, for example, requires a worker to
agree to a fixed term of work; disavow working for or interacting with competitors after the
working relationship ends; or otherwise face restrictions on or sanctions for leaving the job in
order to pursue external economic opportunities, among others. See Saleem, 854 F.3d at 142
(citing Freund v. Hi-Tech Satellite, Inc., 185 F. App’x 782, 784 (11th Cir. 2006)) (observing that
permanency of relation restricts external opportunities). Additionally, the existence of a long-
term working relationship may indirectly indicate permanence. See, e.g., Scantland, 721 F.3d at
1319 (finding permanency where the workers “could not work for other companies, were
required to work long hours, and could not turn down work orders,” such that their relationship
“was not only of long duration, but ... was also exclusive”); Donovan v. Brandel, 736 F.2d 1114,
1117 (6th Cir. 1984) (finding no permanency where the length of the working relationship “was
a product of a mutually satisfactory arrangement”).
Investment in facilities, equipment, or helpers. The third factor is the amount of the worker’s
investment in facilities, equipment, or helpers. If a business makes these investments and
provides them to a worker, that worker may come to rely on the business to supply those
investments in order to perform his or her services. See Keller, 781 F.3d at 810 (“[T]he capital
investment factor is most significant if it reveals that the worker performs a specialized service
that requires a tool or application which he has mastered or that the worker is simply using
implements of the [company] to accomplish the task.” (alteration in original) (quotation marks
omitted)). That reliance could make it more difficult for the worker to pursue other economic
opportunities, thereby increasing the worker’s economic dependence. See Saleem, 854 F.3d at
144–46 (noting, conversely, that greater investments enable workers to more easily pursue
external opportunities, thereby increasing their independence); Scantland, 721 F.3d at 1318
(noting that worker investments are analogous to the “independence any employee has who has
gained experience and the ability to market [themselves] to competing employers”).
Skill, initiative, judgment, and foresight required. The fourth factor is the amount of skill,
initiative, judgment, and foresight required for the worker’s services. In Rutherford, for example,
while the business profited from the alleged independent contractors’ work, the business’s profits
were not because of the workers’ “initiative, judgment[,] or foresight,” as would be expected
from a “typical independent contractor.” Rutherford, 331 U.S. at 730. Instead, the profits resulted
from work that was simply “more like piecework.” Id.; see also Saleem, 854 F.3d at 143-44
(concluding that drivers, “[b]y toggling back and forth between different car companies and
personal clients, and by deciding how best to obtain business from ... clients,” increased their
personal profits “through the[ir] initiative, judgment[,] or foresight,” indicating their
“considerable independence” (internal quotation marks omitted)). This factor may also look to,
for example, whether the worker has the “skills necessary to locate and manage discrete work
projects [that are] characteristic of independent contractors,” as opposed to skills “of the task-
specific, specialized kind that form a piece of a larger enterprise.” Wilson v. Guardian Angel

Nursing, Inc., 2008 WL 2944661, at *13 (M.D. Tenn. 2008). How the worker acquired his skill
is also relevant. Among other things, if “the company provides all workers with the skills
necessary to perform the job,” that suggests employee status. Keller, 781 F.3d at 809; see
Scantland, 721 F.3d at 1318; see also, e.g., Hughes v. Family Life Care Inc., 117 F. Supp. 3d
1365, 1372 (N.D. Fla. 2015) (“The relevant inquiry [for the skill factor] is whether [the worker]
is dependent upon [the company] to equip her with the skills necessary to perform her job.”).
Opportunity for profit and loss. The fifth factor is the worker’s opportunities for profit or loss.
These opportunities typically exist where the worker receives additional compensation based, not
on greater efficiency, but on the exercise of initiative, judgment, or foresight (e.g., commission);
has flexibility to renegotiate compensation throughout the working relationship; or has capital
expenditure at risk in the job. See, e.g., Scantland, 721 F.3d at 1316–17 (examining whether a
worker’s ability to earn more is due to “being more technically proficient,” which indicates
employee status, or instead to “managerial skill,” which indicates independent contractor status);
WHD Opinion Letter, 2002 WL 32406602, at *2–3 (noting, that “courts focus on who, the
alleged employer or employee, controls the major determinants of profit or loss and who
exercises the managerial skills on which profit or loss depend”); WHD Opinion Letter, 2000 WL
34444342, at *5 (discussing how placing capital expenditure at risk indicates independent
contractor status). Opportunities for profit or loss can indicate independent contractor status even
if the worker is not “solely in control of [his or her] profits or losses.” Chao v. Mid-Atl.
Installation Servs., Inc., 16 Fed. App’x 104, 107 (4th Cir. 2001) (emphasis in original).
Integrality. The sixth factor is the extent of the integration of the worker’s services into the
potential employer’s business. For example, a worker’s services are integrated into a business if
they form the “primary purpose” of that business. Werner v. Bell Family Med. Ctr., Inc., 529 F.
App’x 541, 545 (6th Cir. 2013) (observing that an ultrasound technician was not integrated into a
medical center’s business because ultrasounds were not “[t]he heart of [its] business”).
In short, while the FLSA has a very broad scope of coverage, it is not so broad that all workers
are caught within its reach—far from it. See Walling, 330 U.S. at 152; cf. Encino Motorcars,
LLC v. Navarro, 138 S. Ct. 1134, 1142 (2018) (noting “the flawed premise that the FLSA
pursues its remedial purpose at all costs” (quotation marks omitted)). Recognizing this limitation
on coverage protects the freedom of workers to operate as independent contractors and remain
outside the FLSA’s scope.
OPINION
Based on the facts you provide in your letter, it appears that the service providers who use your
client’s virtual marketplace are independent contractors.
Your client provides a referral service. As such, it does not receive services from service
providers, but empowers service providers to provide services to end-market consumers. The
service providers are not working for your client’s virtual marketplace; they are working for
consumers through the virtual marketplace. They do not work directly for your client to the
consumer’s benefit; they work directly for the consumer to your client’s benefit. It is therefore
inherently difficult to conceptualize the service providers’ “working relationship” with your
client, because as a matter of economic reality, they are working for the consumer, not your

client. Indeed, they are similar to certain healthcare providers who use a homecare registry to
obtain clients—workers whom WHD has previously stated can be classified as independent
contractors under appropriate circumstances. See WHD Field Assistance Bulletin 2018-4, at *1
(July 13, 2018) [hereinafter “FAB 2018-4”] (discussing, through the application of numerous
factors, how “a [homecare] registry that simply facilitates matches between clients and
caregivers ... is not an employer”). Thus, it appears that your client’s service providers “do not
fit any ‘traditional employment paradigm covered by the Act.’” WHD Opinion Letter
FLSA2018-29, 2018 WL 6839426, at *2 (Dec. 21, 2018) (quoting Harker v. State Use Indus.,
990 F.2d 131, 133 (4th Cir. 1993)).
Upon consideration of “the circumstances of the whole activity,” Rutherford, 331 U.S. at 730,
WHD does not see any indication that the service providers are economically dependent on your
client within the meaning of the FLSA. A discussion of the following factors demonstrates why.
Control. Your client does not appear to exert control over its service providers. Rather, your
client gives the service providers significant flexibility, including the ability to pursue external
economic opportunities.
First, your client does not impose any duties, such as strict shifts, large quotas, or long hours.
Instead, your client gives them flexibility to choose if, when, where, how, and for whom they
will work, and they regularly use this flexibility to their own profit and personal advantage. The
service providers therefore have complete autonomy to choose the hours of work that are most
beneficial to them. Indeed, your client does not even require them to perform a minimum amount
of work. This freedom enables them to pursue any and all external opportunities at their leisure.
Moreover, they are able to work full-time in your client’s virtual marketplace, but most of them
choose not to do so, which may indicate that they are pursuing other jobs outside your client’s
platform.
Your client provides its service providers the right to work simultaneously for competitors, and
they routinely do so in order to maximize their profit. In fact, they will “multi-app”—that is,
simultaneously run your client’s virtual platform alongside the platform of a competitor to
compare virtual opportunities in real time and pick the best opportunity on a job-by-job basis.
See Parrish, 917 F.3d at 387 (holding that work “on a ‘project-by-project basis’ ... counsels
heavily in favor of [independent contractor] status” (citation omitted)). By providing them the
right to “multi-app,” your client has relinquished control over their external opportunities. See
Saleem, 854 F.3d at 141–42. Your client even allows service providers to cancel jobs in order to
pursue external opportunities on a competitor’s platform. Your client also requires service
providers to pay a cancellation fee only if they cancel a job without providing the consumer
adequate notice.
4

4
Your client does reserve the right to remove a service provider from its virtual marketplace if that person
frequently cancels jobs without adequate notice. However, this or other neutral requirements that your
client imposes—such as background and identity checks before gaining access to the platform—are less
relevant given the general lack of control that your client exercises over when, where, how, and for whom
the service providers work. See, e.g., Thornton v. Charter Commc’ns, LLC, 2014 WL 4794320, at *11
(E.D. Mo. 2014) (“Quality control and compliance-monitoring that stem from the nature of the

Moreover, your client does not inspect a service provider’s work for quality or rate a service
provider’s performance. Indeed, your client does not impose requirements on how its service
providers must perform their work, is not present when the service provider works, and does not
monitor, supervise, or control the particulars of that work. Your client’s lack of control weighs in
favor of the service providers being in business for themselves. The service providers have
complete autonomy to choose the hours of work that are most beneficial to them, may
simultaneously work for competitors of your client without repercussions, and are subject to
minimal, if any, supervision by your client. Accordingly, this factor weighs heavily in favor of
independent contractor status.
Permanency of relation. Your client does not appear to have a permanent working relationship
with its service providers that would be indicative of an employer-employee relationship. In fact,
the service providers appear to maintain a high degree of freedom to exit the working
relationship. Most importantly, your client does not restrict them from interacting with
competitors, either during the relationship itself (since service providers may work on multiple
platforms simultaneously) or after the relationship ends.
Your letter does not indicate how long service providers typically remain “active” on your
client’s virtual marketplace. However, even assuming, in light of your client’s promise that it
will terminate a relationship with a service provider only for cause, that service providers
maintain a lengthy working relationship with your client, they do so only “on a ‘project-by-
project basis’” Parrish, 917 F.3d at 387. This factor weighs strongly in favor of independent
contractor status.
Investment in facilities, equipment, or helpers. Your client does not invest in facilities,
equipment, or helpers on behalf of its service providers. Instead, your client requires its service
providers to purchase all necessary resources for their work, and your client does not reimburse
those purchases.
Your client primarily invests in its virtual referral platform, but those investments do not, alone,
establish an employment relationship with the service providers who use that platform because
they are not investments in the work the service providers perform. See FAB 2018-4, at *8
(stating that a homecare registry’s investments in “office space, payroll software, timekeeping
systems, and other products to operate its business” do not, without more, establish an
employment relationship with a caregiver on its registry, but that “investments in the tools
necessary for the caregiver to perform his or her services may indicate” economic dependence).
To be sure, the service providers rely on your client’s software to quickly obtain jobs, but that
reliance only marginally decreases their relative independence, because they can use similar
software on competitor platforms. Overall, this factor weighs in favor of independent contractor
status.
business—that is, from the nature of the goods or services being delivered—are qualitatively different
from control that stems from the nature of the relationship between the employees and the putative
employer.” (quotation marks omitted)); FAB 2018-4, at *2 (noting that a homecare registry may “confirm
caregiver credentials, conduct background checks, contact professional references, and engage in other
quality-control measures,” without establishing an employment relationship).

Skill, initiative, judgment, or foresight required. Your letter does not specifically identify what
types of services are offered on your client’s virtual marketplace. However, regardless of the
specific services they perform, your client’s service providers, like the drivers in Saleem, choose
between different service opportunities and competing virtual platforms and exercise managerial
discretion in order to maximize their profits, thereby showing “considerable independence” from
your client. See Saleem, 854 F.3d at 143–44. Additionally, your client’s service providers do not
undergo mandatory training. The fact that they do not appear to rely on your client to provide
them with training also increases their economic independence. See Scantland, 721 F.3d at 1318
(skills obtained through an employer’s training are less indicative of independent contractor
status). The exercise of managerial discretion and the lack of training weighs in favor of
independent contractor status.
Opportunity for profit and loss. Your client’s service providers do not “receive [a]
predetermined amount” of compensation for their work, but instead “control[] the major
determinants of profit or loss.” WHD Opinion Letter, 2002 WL 32406602, at *2–3. Your client
sets default prices, but it allows service providers to choose different types of jobs with different
prices, take as many jobs as they see fit, and negotiate the price of their jobs. They can further
control their profit or loss by “toggling back and forth between different” competing VMC
platforms. See Saleem, 854 F.3d at 144. Additionally, because your client charges a fee for
cancelled services, the service providers risk losing money if they do not complete a job they
have accepted. These opportunities for profit or loss give them a substantial amount of control
over their level of compensation, and therefore independence from your client. Moreover,
service providers’ flexibility to work for different platforms, choose how to perform the job,
choose different jobs with different prices, negotiate the prices of their jobs, and choose whether
or not cancelling a job is worthwhile indicates that their opportunity for profit or loss is driven by
their own managerial skill, not simply their productivity. This factor therefore weighs in favor of

independent contractor status, even though your client—by setting default prices—retains some
control over their profits and losses. Mid-Atl. Installation Servs., 16 F. App’x at 107.
Integrality. Your client’s service providers are not integrated into your client’s referral business.
First, the service providers who use your client’s virtual platform do not develop, maintain, or
otherwise operate that platform; rather, they use that platform to acquire service opportunities.
Your client offers a finished product to its service providers; its business operations effectively
terminate at the point of connecting service providers to consumers and do not extend to the
service provider’s actual provision of services. In other words, the service providers are not an
integral part of your client’s referral service; they are consumers of that service from your client
and negotiate with your client over the terms and conditions of using that service. Accordingly,
they are not operationally integrated into your client’s business.
Relatedly, the business’s “primary purpose” is not to provide services to end-market consumers,
but to provide a referral system that connects service providers with consumers. Werner, 529 F.
App’x at 545. This lack of integration weighs in favor of independent contractor status. See
Saleem, 854 F.3d at 142.

CONCLUSION
Under the facts described in your letter, we conclude that your client’s service providers are
independent contractors, not employees of your client. The facts in your letter demonstrate
economic independence, rather than economic dependence, in the working relationship between
your client and its service providers. The FLSA therefore recognizes your client’s status as
independent contractors.
We trust that this letter is responsive to your inquiry.
Sincerely,
K
eith E. Sonderling
Acting Administrator
*Note: The actual name(s) was removed to protect privacy in accordance with 5 U.S.C.
§ 552(b)(7).