On February 26, 2026, the Department of Labor (DOL) announced a proposed rule for determining whether a worker is an independent contractor or employee. This is the latest salvo in an issue that has swung back and forth with each change in administration. Indeed, we have previously reported on prior iterations of changes to this rule in 2024 and even earlier in 2015.
With the most recent revisions, the DOL advertised that the proposed rule promotes predictability and clarity. The proposed rule likely will not provide long-term predictability or clarity for employers considering whether to classify workers as independent contractors or employees. If implemented, employers should carefully review the rule and consider its impact on their past and future decisions to classify workers as independent contractors. Even if the proposed rule is put into practice, employers should continue to adopt a thoughtful and long-term analysis when classifying workers as independent contractors.
What are the Consequences of Classifying Workers as Independent Contractors?
Classifying a worker as an employee or independent contractor has significant consequences under many federal and state laws protecting employees. Importantly, the Fair Labor Standards Act’s (FLSA) minimum wage and overtime requirements apply to nonexempt employees. These requirements do not apply to independent contractors. (The DOL’s proposed rule would also apply to the classification of workers under the Family Medical...
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