DOL Reinstates Virtual Marketplace Platform Opinion Letter Signaling Return to Relaxed Independent Contractor Test and Acceptance of Gig Platform Model

In recent months, the Department of Labor (DOL) has seen an overhaul of its agency leadership. First, President Trump appointed Secretary of Labor Lori Chavez-DeRemer and Deputy Secretary Keith Sonderling, and more recently, on May 23, 2025, five additional political appointees were assigned to the Wage & Hour Division (WHD), including Acting Administrator Donald M. Harrison III.¹

On May 1, 2025, the new DOL leadership announced that it would no longer enforce the 2024 Biden administration independent contractor rule under the Fair Labor Standards Act (FLSA). In the same announcement, the DOL also reinstated Opinion Letter FLSA 2019-6 (“Opinion Letter”), which the Biden administration previously withdrew on February 19, 2021.² Although opinion letters do not carry the weight of law, they do indicate how the issuing agency views the particular issue at hand, which can be valuable with emerging topics or circumstances that courts have not fully addressed. To that end, this Opinion Letter was and remains significant as a first-of-its-kind advisory opinion addressing the classification of participants in the gig platform economy. 

Overview of Opinion Letter FLSA 2019-6, now known as Opinion Letter 2025-2

The subject of the Opinion Letter is an unidentified virtual marketplace company (VMC) that provides an online platform connecting service providers with consumers. The VMC requested the DOL to consider whether service providers on the VMC platform are employees or independent contractors under the FLSA. The DOL described VMCs broadly as “an online and/or smartphone-based referral service that connects service providers to end-market consumers to provide a wide variety of services, such as transportation, delivery, shopping, moving, cleaning, plumbing, painting, and household services.” 

In the reinstated Opinion Letter, the DOL applied the longstanding six-factor economic realities test, finding that the service providers utilizing VMC’s online platform “are independent contractors, not employees of the [VMC].” The DOL considered the following factors in reaching its decision:

1. The nature and degree of the potential employer’s control.  A business may have control where it, for example, requires a worker to work exclusively for the business; disavow working for or interacting with competitors during the working relationship; work against the interests of a competitor; work inflexible shifts, achieve large quotas, or work long hours, so that it is impracticable to work elsewhere; or otherwise face restrictions on or sanctions for external economic conduct, among others.
2. The permanency of the worker’s relationship with the potential employer. Permanence of relationship arises where a business, for example, requires a worker to agree to a fixed term of work; disavow working for or interacting with competitors after the working relationship ends; or otherwise face restrictions on or sanctions for leaving the job in order to pursue external economic opportunities, among others.
3. The amount of the worker’s investment in facilities, equipment or helpers. If a business makes these investments and provides them to a worker, that worker may come to rely on the business to supply those investments in order to perform their services.
4. The amount of skill, initiative, judgment or foresight required for the worker’s services. While the business profited from the alleged independent contractors’ work, the business’s profits were not because of the workers’ “initiative, judgment[,] or foresight,” as would be expected from a “typical independent contractor.”³
5. The worker’s opportunities for profit or loss. These opportunities typically exist where the worker receives additional compensation based, not on greater efficiency, but on the exercise of initiative, judgment, or foresight (e.g., commission); has flexibility to renegotiate compensation throughout the working relationship; or has capital expenditure at risk in the job.
6. The extent of integration of the worker’s services into the potential employer’s business. A worker’s services are integrated into a business if they form the “primary purpose” of that business.⁴

In the Opinion Letter, the DOL explained how it found all six factors pointed to “economic independence, rather than economic dependence, in the working relationship between [the VMC] and its service providers.” The DOL highlighted case law supporting this interpretation, finding that the Company “empowers service providers to provide services to end-market consumers” and “as a matter of economic reality” the service providers are working for the consumer, not the Company operating the platform. 

What Does This Mean for Virtual Marketplace Platforms and Workers on Them?

By reinstating the Opinion Letter, the DOL appears to be signaling a pendulum swing back to a more lenient independent contractor standard under the FLSA. At least in the foreseeable future, the DOL will continue to rely on its guidance in the Opinion Letter and may take further actions to solidify its opinion about the proper classification of virtual market participants. 

Historically, federal courts have relied on administrative agency interpretative statements when resolving lawsuits, especially in the wage and hour context. In fact, prior to the Biden administration’s withdrawal of the Opinion Letter, numerous federal courts relied on it when considering the classification of participants in the gig economy.⁵ For example, in Franze v. Bimbo Foods Bakeries Distribution, LLC, the U.S. District Court for the Southern District of New York in granting defendant’s motion for summary judgment primarily relied on the Opinion Letter in holding that the former delivery drivers were properly classified as independent contractors.⁶ However, following the U.S. Supreme Court’s 2024 decision in Loper Bright Enterprises v. Raimondo, this degree of agency deference will likely decrease although it is unclear to what extent.

For companies operating in the gig economy, and businesses considering offerings in the virtual marketplace space, this latest development provides hope for a generally more business-friendly approach to employee classification under the FLSA. Businesses should be mindful that this is an area of law that is uniquely vulnerable to fluctuation, and that many states and localities have their own employment laws and unique tests for independent contractor status, which in some cases is much more strict than the federal standard. As such, any change to one’s business model or relationship with market participants in light of the reinstated Opinion Letter should be vetted for compliance under both federal and state law, and with an understanding of the spectrum of employee classification standards that apply (or could apply in the future).