{"id":9546,"date":"2026-01-14T17:41:03","date_gmt":"2026-01-14T17:41:03","guid":{"rendered":"https:\/\/usatrustedlawyers.com\/blog\/dol-declines-to-enforce-biden-era-independent-contractor-rule\/"},"modified":"2026-01-15T17:39:51","modified_gmt":"2026-01-15T17:39:51","slug":"dol-declines-to-enforce-biden-era-independent-contractor-rule","status":"publish","type":"post","link":"https:\/\/usatrustedlawyers.com\/blog\/dol-declines-to-enforce-biden-era-independent-contractor-rule\/","title":{"rendered":"DOL Declines to Enforce Biden-Era Independent Contractor Rule"},"content":{"rendered":"
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On May 1, 2025, the U.S. Department of Labor Wage and Hour Division (\u201cDOL\u201d) announced that it will cease enforcement of its 2024 Final Rule regarding independent contractor classification under the Fair Labor Standards Act (\u201cFLSA\u201d), and will instead apply a framework set out in DOL guidance from 2008. Because the 2024 Final Rule has not been repealed or replaced, it \u201cremains in effect for purposes of private litigation\u201d according to the DOL. Our blog post discussing the 2024 Final Rule and its history is available here.<\/p>\n

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In a Field Assistance Bulletin<\/a> published on May 1, 2025, the DOL announced that it \u201cwill no longer apply\u201d the DOL\u2019s 2024 Final Rule on independent contractor classification for purposes of determining whether a worker is an employee or independent contractor under the FLSA. As we previously discussed, the 2024 Final Rule uses a six-factor, totality of the circumstances test that focuses on the economic realities of a worker\u2019s relationship with a potential employer and whether the worker is economically dependent on the potential employer or in business for themself.<\/p>\n

Instead, going forward, the DOL \u201cwill enforce the FLSA in accordance with [a July 2008] Fact Sheet<\/a> . . . as further informed by [a previously withdrawn 2019] Opinion Letter<\/a>\u201d in any investigation \u201cfor which no payment has been made\u201d (either to an individual or to DOL) as of May 1, 2025. The DOL stated that it is making this change because it has \u201ctaken the position in . . . lawsuits that it is reconsidering the 2024 Rule, including whether to rescind the regulation,\u201d and is \u201ccurrently reviewing and developing the appropriate standard.\u201d<\/p>\n

The 2008 Fact Sheet asserts that \u201can employee, as distinguished from a person who is engaged in a business of his or her own, is one who, as a matter of economic reality, follows the usual path of an employee and is dependent on the business which he or she serves. The employer-employee relationship under the FLSA is tested by \u2018economic reality\u2019 rather than \u2018technical concepts.\u2019\u201d It states that the following factors are \u201cconsidered significant\u201d based on \u201cthe total activity or situation\u201d:<\/p>\n

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  1. The extent to which the services rendered are an integral part of the principal\u2019s business;<\/li>\n
  2. The permanency of the relationship;<\/li>\n
  3. The amount of the alleged contractor\u2019s investment in facilities and equipment;<\/li>\n
  4. The nature and degree of control by the principal;<\/li>\n
  5. The alleged contractor\u2019s opportunities for profit and loss;<\/li>\n
  6. The amount of initiative, judgment, or foresight in open market competition with others required for the success of the claimed independent contractor; and<\/li>\n
  7. The degree of independent business organization and operation.<\/li>\n<\/ol>\n

    Additionally, pursuant to the 2008 Fact Sheet, certain factors are \u201cimmaterial\u201d to determining \u201cwhether there is an employment relationship,\u201d including (i) where work is performed; (ii) the absence of a formal employment agreement; (iii) whether an alleged independent contractor is licensed by a state or local government; and (iv) the time or mode of pay.<\/p>\n

    The 2019 Opinion Letter cited by the DOL addresses whether the workers of a \u201cvirtual marketplace company\u201d that provides an \u201conline and\/or smartphone-based referral service that connects service providers to end-market consumers\u201d are employees or independent contractors, and concludes that such workers are independent contractors, not employees. The Opinion Letter takes the position that the \u201ctouchstone of employee versus independent contractor status has long been \u2018economic dependence,\u2019\u201d based on six factors (similar to those stated above) that are weighed \u201cto answer the ultimate inquiry of whether the worker is \u2018engaged in business for himself or herself,\u2019 or \u2018is dependent upon the business to which he or she renders service.\u201d<\/p>\n

    Employers should continue to monitor this area, including because the DOL has signaled that additional rulemaking regarding independent contractor classification under the FLSA may be forthcoming.<\/p>\n<\/p><\/div>\n<\/p><\/div>\n\n\n

    Read More:<\/strong><\/p>\n\n\n\n