Five lawsuits, $682 million in savings, and a deadline HR can't miss
The Labor Department wants to tear up its own independent contractor rule and start over – and HR teams should pay close attention.
On February 27, 2026, the Department of Labor published a proposed rule that would rescind the 2024 framework for determining whether a worker is an employee or an independent contractor under the Fair Labor Standards Act. In its place, the Department wants to bring back a modified version of the analysis it adopted in January 2021, complete with a hierarchy of factors that the 2024 Rule deliberately abandoned.
The practical upshot for HR professionals is this: not all factors in the classification test would carry equal weight anymore.
Under the proposal, two "core" factors would sit at the top of the analysis – the degree of control over the work and the worker's opportunity for profit or loss. If both point in the same direction, the Department says there is a "substantial likelihood" that is the correct classification. Three other factors – the skill required, how permanent the relationship is, and whether the work fits into the employer's production process – would still be considered, but the Department describes them as "less probative" and says they are "highly unlikely" to override the two core factors when both agree.
The Department did not mince words about why it wants the 2024 Rule gone. It called the current framework too vague, too repetitive, and too likely to...
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