I read the U.S. Department of Labor’s Employee or Independent Contractor Classification Under the Fair Labor Standards Act so you don’t have to. Here’s how it breaks down for marketing directors who need freelancers to keep their operations running smoothly. This is not legal advice and should not be construed as such.

Being a marketing director isn’t easy. You’re already being squeezed from both ends: employees scrambling to keep up with content writing or other creative tasks and stakeholders who want to see results yesterday. Up until January, unless you were subject to California’s AB5, you could hire independent contractors and freelancers without any worries to fill your content writing, graphic design, videography, or other gaps. But now, you must also grapple with the ins and outs of worker classification under the Fair Labor Standards Act (FLSA).

The FLSA serves as a roadmap for labor standards in the U.S., covering essentials like minimum wage and overtime pay. But one particularly important area for us, including marketing directors, managers, and freelancers, is how workers are classified—as employees or independent contractors. This distinction can have significant implications for you and the freelancers you hire.

The January 2024 document published in the Federal Register highlights the importance of getting worker classification right. Misclassifying someone can lead to legal trouble, including fines and back pay obligations. So, it’s essential to understand the new rule before hiring freelancers or renewing their contracts.

Three main factors determine whether workers are classified as freelancers/independent contractors or employees. Here’s how they break down.

Control Over the Freelancer’s Work

First, there’s your level of control over the freelancer’s work. It’s normal to provide guidance and set expectations, but if you’re micromanaging every aspect of their work, it looks more like an employee-employer relationship. Basically, a freelancer should be able to work hours that they set as long as they get the work done.

Finances

Earnings and expenses are another way that freelancers and independent contractors differ from traditional employees. They tend to set their own rates and assume more risk, unlike employees, who receive a set paycheck.

How Integral the Work Is to the Business

Lastly, consider how integral the freelancer’s work is to your business. In marketing, where content is everything, the work of writers and designers can be central to your operations. If what they’re doing is essential to your business, they might lean more towards being classified as employees. You’ll want to consult your attorney to structure contracts and agreements properly and ensure you’re not crossing the line into employee territory. For, say, a B2B software company, there is more wiggle room to hire freelance writers and designers to fill gaps in your marketing team.

So, if you’re a marketing director or manager who needs to hire a freelance writer or designer, what do you do to stay on the right side of regulators? (Aside from having a chat with your company’s legal counsel, because I can’t say this enough: I am not a lawyer, and I’m not providing legal advice. I’m just trying to stay on the right side of the law, too.)

  1. Document, document, document. Write down everything. Outline the terms of your agreements clearly: project details, payment structures, and any other expectations you have for your freelancers. Have your legal counsel look over agreements and SOWs. Put everything in writing.
  2. Build good relationships with your freelancers. If you treat your freelancers as partners, not just contractors, they’ll trust you more and be more willing to work with you if you have to push back due to FLSA constraints. They’ll showcase their skills and align their work with your company’s goals. And if you slip up accidentally (not on purpose; please don’t take advantage of freelancers’ good natures), they’re less likely to run to the DOL. They should feel comfortable saying, “Hey, Marketing Director, I noticed you want me to start working between 9 am and 5 pm Eastern time. I typically work those hours, but that’s pretty close to employee status, and I don’t want you to get in trouble for it.”

Basically, learn as much as you can about worker classification under the FLSA to ensure compliance when hiring freelancers for creative work. Once you understand what crosses the line into employment status and can foster transparent, collaborative relationships with freelancers, you can hire independent contractors to bolster your marketing team confidently.

So what are you waiting for? Contact me today to find out how we can work together in full compliance with FLSA.