On May 1, 2025, the U.S. Department of Labor (DOL) announced it will no longer enforce a 2024 rule on determining independent contractor status.
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In a field assistance bulletin, the DOL said it will use the interpretations in the 2008 fact sheet and the 2019 opinion letter to enforce any matters for which no payment has been made to individuals or to the DOL for back pay or civil penalties as of May 1, 2025.
“[T]he 2024 Rule remains in effect for purposes of private litigation, and nothing in this [field assistance bulletin] changes the rights of employees or responsibilities of employers” under the Fair Labor Standards Act (FLSA), the bulletin stated. However, the agency may decide to rescind the 2024 rule, which is facing several lawsuits in court.
The older standard usually gave employers more flexibility to classify workers as independent contractors.
The independent contractor rule has significant financial ramifications for employers. Unlike employees, independent contractors do not qualify for overtime pay, minimum wage, unemployment benefits or workers’ compensation benefits. Independent contractors are not covered by federal employment laws like the FLSA, the Family and Medical Leave Act, and the Americans with Disabilities Act.
Changes to the Independent Contractor Rule
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