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DOL Issues Independent Contractor Proposal. Today, the U.S. Department of Labor’s (DOL) Wage and Hour Division issued a notice of proposed rulemaking, titled, “Employee or Independent Contractor Status Under the Fair Labor Standards Act, Family and Medical Leave Act, and Migrant and Seasonal Agricultural Worker Protection Act.” The proposal would officially rescind the January 2024 regulation promulgated by the Biden administration, which the DOL is no longer enforcing. The DOL argues that the 2024 rule “fails to provide an analysis for distinguishing between independent contractors and employees under the FLSA that is sufficiently clear and leads to predictable outcomes.”

In its place, DOL proposes a new independent contractor test that largely follows the regulation that was finalized in the closing days of the first Trump administration in 2021 but never went into effect. As in the previous proposal, this latest effort would adopt an “economic realities” test for determining whether a worker is an independent contractor or an employee. This test focuses on two core factors: the nature and degree of control over the work, as well as the worker’s opportunity for profit or loss. The proposal also readopts the six illustrative examples contained in the 2021 rule (while tweaking the example...

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