SHRM is broadly supportive of the U.S. Department of Labor’s (DOL) proposal to revise how organizations determine whether a worker is an employee or an independent contractor under the Fair Labor Standards Act (FLSA). But in its comment submitted during the rule’s public comment period, SHRM also urged the agency to make several targeted changes to ensure the final regulation is practical for organizations to apply.
According to the public comment, SHRM “strongly supports the proposed rule and urges the Division to finalize it with the clarifications and refinements identified [within our regulatory comment].”
The proposed rule would rescind the DOL’s 2024 independent contractor regulation, moving from a totality-of-the-circumstances approach back to a Core Factors test, with economic dependence as the central inquiry. Under the proposed rule, two primary factors that carry the most weight in the classification analysis: nature and degree of control over the work and the individual’s opportunity for profit or loss.
The proposed rule also identifies secondary or guidepost factors, which provide additional context but are less determinative. These factors include skill required to perform the work, permanence of the work relationship, and the extent in which work is integrated into the employer’s production processes.
SHRM endorsed the DOL’s decision to roll back the 2024 rule, arguing it undermined its own goals of clarity and accuracy.
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