DOL Opinion Letter Helps Determine if Independent Contractor Status of Virtual Marketplace Workers Can Open a Solo 401k Plan

Solo 401k plans are for the self-employed including independent contractors. The Department of Labor (DOL) recently released opinion letter (FSLA2019-6) that sheds light on who is considered an independent contractor (e.g., drivers for Uber and Lyft transportation services) in the  “virtual marketplace” economy. The DOL letter specifically answers  whether service providers working for a virtual marketplace company (VMC) are employees or independent contractors under the Fair Labor Standards Act (FLSA).

The DOL opinion letter essentially confirms that virtual marketplace personal are independent contractors.

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.

The DOL Wage & Hour Division (WHD)  reviewed the following items to make it’s opinion:

  • The nature and degree of the potential employer’s control
  • The permanency of the worker’s relationship with the potential employer
  • The amount of the worker’s investment in facilities, equipment, or helpers
  • The amount of skill, initiative, judgment or foresight required for the worker’s services
  • The worker’s opportunities for profit or loss
  • The extent of integration of the worker’s services into the potential employer’s business

To search other DOL opinion letters, Visit here.


About Mark Nolan

Each day I speak with energetic entrepreneurs looking to take the plunge into a new venture and small business owners eager to take control of their retirement savings. I am passionate about helping others find their financial independence. Having worked for over 20 years with some of the top retirement account custodian and insurance companies I have a deep and extensive knowledge of the complexities of self-directed 401ks and IRAs as well as retirement plan regulations. Learn more about Mark Nolan and My Solo 401k Financial >>


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