The February 26, 2026, “Newish” Independent Contractor Test

The independent contractor test under the Fair Labor Standards Act (FLSA), which determines whether an individual is classified as an employee or an independent contractor, has started to resemble a ping-pong match — over the last five years the test has changed three times — leaving employers uncertain whether they may face steep penalties for employee misclassification. On Friday, February 26, 2026, the Department of Labor (DOL) issued a proposed rule that largely reverts back to the 2021 business-friendly, five-part “economic reality” test to determine independent contractor status under FLSA, the Family and Medical Leave Act (FMLA), and the Migrant and Seasonal Agricultural Worker Protection Act (MSPA) (the proposed rule).

The proposed rule seeks to replace President Biden’s 2024 “totality of the circumstances” rule. The back and forth (summarized below) has left businesses grasping for certainty in classifying workers.

• 2021 (Trump administration): Established a five-factor “economic reality” test, elevating two core factors (control and opportunity for profit/loss) as the most important.
• 2024 (Biden administration): Rescinded the 2021 rule, returning to a six-factor “totality of the circumstances” test, where no single factor was weighted more than others, making it harder to classify workers as independent contractors.
• 2026 (Proposed – Trump administration): The 2026 proposed rule aims to reverse the...

Read Full Story: https://news.google.com/rss/articles/CBMizAFBVV95cUxPc25iNWVKUnlxazdXTUJTYTBo...