DOL Pauses Enforcement of Biden’s Independent Contractor Rule

May 7, 2025

What's New

The Labor Department (DOL) will no longer enforce the existing independent contractor rule, DOL  announced  May 1. Instead, when deciding whether a worker is an employee or an independent contractor, the Wage and Hour Division will rely on  Fact Sheet #13  (which originated during President George W. Bush’s term), according to Field Assistance Bulletin No. 2025-1.  

The Fair Labor Standards Act’s (FLSA) minimum wage and overtime provisions apply to covered employees but not to independent contractors, so a worker’s classification has repercussions for an employer. 

In 2021, the first Trump Administration published an independent contractor rule that prioritized the company’s control over the worker and the worker’s opportunity for profit or loss from the work. In 2024, the Biden Administration’s DOL rescinded the Trump rule and published a rule that makes it harder for an employer to classify a worker as an independent contractor. The Biden rule has been challenged in several lawsuits, and the Trump DOL is considering rescinding it.  

What It Means

While the new interpretation reflects the current administration’s enforcement priorities, the FLSA can still be enforced through private litigation. We expect that plaintiffs’ lawyers will continue to use the logic underlying the Biden rule.

What You Should Do

Employers seeking to mitigate their risk should continue to scrutinize independent contractor arrangements for potential misclassification. Consider attending CWC’s Fundamentals of Wage and Hour Compliance course for in-depth training in worker classification issues.

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