21 maio 2025 Andrew Gaines  -  Janet M. Lee  - Sonia Bennett Employment and Incentives

U.S. DOL Will Not Enforce 2024 Independent Contractor Rule

On May 1, 2025, the U.S. Department of Labor’s (“DOL”) Wage and Hour Division announced through Field Assistance Bulletin No. 2025-1, that it “will no longer apply” the 2024 independent contractor rule (the “2024 Rule”) regarding the criteria used to determine whether a worker qualifies as an employee or independent contractor under the Fair Labor Standards Act (“FLSA”). Instead, the DOL is returning to older guidance that predates the 2024 Rule, and it is “currently reviewing and developing the appropriate standard for determining FLSA employee versus independent contractor status.”

As we previously discussed, the 2024 Rule adopted a six-factor, totality-of-the-circumstances test which looked at the “economic reality” of the worker relationship and focused on worker’s economic dependence on an employer. With this new guidance, the DOL will revert to applying earlier long-standing classification guidance from its 2008 Fact Sheet #13 and Opinion Letter FLSA2019-6.

Under the 2008 Fact Sheet #13, determining whether a worker is an independent contractor involves several key factors, including:

  1. Whether the workers’ services are an integral part of the principal’s business.
  2. The duration of the working relationship.
  3. The amount of the alleged contractor’s investment in facilities and equipment.
  4. The nature and degree of control over the worker’s activities.
  5. The alleged contractor’s opportunities for profit and loss.
  6. The amount of initiative, judgment, or foresight in open market competition with others required for the success of the claimed independent contractor.
  7. Whether the worker operates an independent business.

This approach also incorporates elements from the 2019 Opinion Letter regarding gig economy workers, particularly those employed by virtual platforms.

Key Takeaways and Considerations
  • The 2024 Rule remains in effect for purposes of private actions. Until further action is taken by the DOL, the 2024 Rule remains in effect for purposes of private litigation. However, as of May 1, 2025, the DOL will enforce worker misclassification cases using the older frameworks discussed above.
  • State-level frameworks remain critical. Many states have enacted their own methods for classifying workers, some of which are stricter than the federal guidelines. Employers should bear in mind that they need to comply with all applicable laws.
  • Practical effect on workers. The practical effect of reverting to older guidance that predates the 2024 Rule is that more workers will likely be classified as independent contractors under FLSA.
  • Compliance with FLSA obligations remain. Despite the shifting enforcement guidelines, workers’ protections and employers’ obligations under FLSA remain unaffected. Employers should remain diligent in meeting federal labor requirements.

We are monitoring developments and potential impact on employers and will provide updates as they become available. Please reach out to our U.S. Executive Compensation and Employee Benefits team if you have any questions or would like to discuss.