DOL Hits Pause on Enforcement of Biden-Era Independent Contractor Rule, Suggests New or Changed Rule Forthcoming

As expected with a change in the White House, and as very recently foretold in Department of Labor court filings, the Trump DOL announced via a Field Assistance Bulletin on May 1 that it will no longer enforce a 2024 Biden-era independent contractor rule under the Fair Labor Standards Act (FLSA). While this announcement does not formally rescind the Biden-era rule, the DOL explained that it will be reconsidering the rule, and it is virtually certain that the DOL will dramatically change or replace the rule when its review is completed. 

Followers of contractor and employee classification legal developments will recall that the first Trump administration issued an independent contractor rule in its final days that significantly clarified the standards for determining contractor status and generally expanded the instances in which a worker could be deemed an independent contractor. Very soon after taking office, President Biden initially attempted to delay implementation of that rule, but a federal court found that action violated the Administrative Procedure Act. The Biden administration then sought to create its own rule, which ultimately led to the rule at issue here being finalized in January of 2024. The Biden-era rule reversed much of what that first Trump administration rule had changed and generally made it harder to classify workers as independent contractors. Within days of the Biden-era rule being finalized, various businesses and freelancers initiated litigation challenging the rule, with many of those lawsuits still pending. When President Trump recently returned to the White House, the DOL’s position in defending those lawsuits understandably changed, with the DOL asking just weeks ago to place most of that litigation on hold. 

What’s the DOL’s New Guidepost?

While the DOL’s review and reconsideration of the rule continues, the Field Assistance Bulletin notes that, effective May 1, 2025, the DOL will enforce the FLSA in accordance with Fact Sheet #13 (from July 2008, not March 2024) and as further informed by the reinstated Opinion Letter FLSA2019-6, which addresses classification in the context of virtual marketplace platforms. 

What Now for Employers?

Employers should carefully review Fact Sheet 13 (from July 2008) because it varies significantly from the 2024 rule that DOL investigators or others may have been considering as controlling. Employers should also recall the dozens of different standards for independent contractor status under other employment laws, including those at the state and sometimes local level, and remain vigilant in complying with those laws while the DOL continues its review and likely dramatic altering of independent contractor criteria under the FLSA. Experience shows that those other employment laws also have shifting regulations or even statutory changes, so employers should not wait for a “quiet time” in the world of worker classification to evaluate their policies and practices because that time may never arrive.