{"id":18056,"date":"2026-03-04T12:04:08","date_gmt":"2026-03-04T17:04:08","guid":{"rendered":"https:\/\/gtm.com\/business\/?p=18056"},"modified":"2026-03-25T11:03:06","modified_gmt":"2026-03-25T15:03:06","slug":"dol-independent-contractor-rule","status":"publish","type":"post","link":"https:\/\/gtm.com\/business\/dol-independent-contractor-rule\/","title":{"rendered":"DOL Proposes New Independent Contractor Rule"},"content":{"rendered":"

\"dol<\/p>\n

On Feb. 26, 2026, the U.S. Department of Labor (DOL) announced a proposed rule<\/a> that would rescind the department\u2019s 2024 final independent contractor rule and replace it with an analysis for employee classification under the Fair Labor Standards Act (FLSA) similar to the one adopted by the DOL in 2021. The proposed rule was published<\/a> in the Federal Register on Feb. 27, 2026.<\/p>\n

Background<\/h2>\n

A worker\u2019s coverage by a particular law or entitlement to a particular benefit often depends on whether they are an employee or an independent contractor. In general, labor laws and related tax laws do not apply to independent contractors. Under the FLSA, employees are entitled to minimum wage, overtime pay, and other benefits. Independent contractors are not entitled to these protections and benefits.<\/p>\n

Employers who misclassify employees may be liable for costly fines and litigation if a worker should have been classified as an employee but did not receive the benefits or protections they were entitled to under the law.<\/p>\n

2024 Final Rule<\/h2>\n

On Jan. 9, 2024, the DOL released a final rule, effective March 11, 2024, that revised the agency\u2019s guidance on how to determine whether an individual is an employee or an independent contractor under the FLSA. The 2024 final rule rescinded the 2021 independent contractor rule that was published on Jan. 7, 2021, and restored the multifactor, totality-of-the-circumstances analysis to assess whether a worker is an employee or an independent contractor under the FLSA. Under the 2024 rule, six economic reality factors were weighed to assess whether a worker was economically dependent on a potential employer for work, based on the totality of the circumstances. However, several federal lawsuits challenged the 2024 final rule. In those lawsuits, the DOL took the position that it was reconsidering the final rule, including whether to rescind it.<\/p>\n

On May 1, 2025, the DOL issued Field Assistance Bulletin 2025-1<\/a> on determining employee or independent contractor status when enforcing the FLSA. While the DOL reviewed the 2024 final rule, the DOL\u2019s Wage and Hour Division (WHD) stated it would no longer apply the 2024 final rule\u2019s analysis when determining employee versus independent contractor status in FLSA investigations. Instead, the WHD will rely on principles outlined in Fact Sheet #13<\/a> and the reinstated Opinion Letter FLSA2019-6<\/a>, which addresses classification in the context of virtual marketplace platforms.<\/p>\n

Proposed Rule<\/h2>\n

The proposed rule would:<\/p>\n