Independent Contractors

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Takeaways

  • The National Labor Relations Board has reinstated its 2020 joint employer standard, requiring substantial direct and immediate control over essential terms and conditions of employment to establish joint employer status.
  • The U.S. Department of Labor has proposed rescinding its 2024 independent contractor rule and returning to a Trump-era “economic reality” framework.
  • Employers should proactively reassess joint employer relationships and independent contractor classifications in light of these regulatory shifts and the DOL’s anticipated final rule later this spring.

NLRB Returns to 2020 Joint Employer Status Test

On February 26, 2026, the National Labor Relations Board announced a return to the joint employer status test in effect during President Trump’s first administration. The final rule replaces a 2023 Biden-era test that was vacated by an order from the United States District Court for the Eastern District of Texas on March 8, 2024. The Board explained that its final rule replaces the vacated regulatory text with the previous version of its rules that remain in effect after the Texas Order.

Continue Reading Flip-Flop: Feds Announce a Final Rule on Joint Employer Status and a Proposed Rule on Independent Contractor Status

Takeaways

  • The DOL will no longer seek liquidated damages during investigations unless a court orders them following a lawsuit.
  • The DOL will disregard the 2024 independent contractor rule and revert to longstanding common-law standards.
  • The Opinion Letter Program has been reinstated, offering employers clearer compliance guidance under the FLSA.

It’s been just over 100 days under the new Administration. We have a new Secretary of Labor, and we’re on the cusp of most of the other nominees for key DOL positions being confirmed by the Senate. Even with some key posts unfilled, during this short period, a number of key shifts in DOL enforcement policy have occurred. Here is a summary of just a few.

Continue Reading 3 Important DOL Wage and Hour Enforcement Changes Employers Should Watch

On January 9, 2024, the U.S. Department of Labor issued final rules for employers to determine if a worker is an independent contractor or employee. Workers who do not meet the new criteria under the rule must be classified as employees and subject to the Fair Labor Standards Act  (“FLSA”) protections and requirements. If misclassified, these workers must be treated as employees and will be eligible for overtime pay, unless they otherwise satisfy the requirements to be considered exempt, and be subject to the minimum wage requirements under the FLSA. The employer would also need to comply with the recordkeeping requirements and maintain daily and weekly time records for the worker.

Continue Reading To Be or Not to Be (An Independent Contractor): U.S. Department of Labor Issues Final Rules for Employers

The U.S. Department of Labor on Tuesday unveiled a six-step “economic realities” test that looks to narrow the ability of employers to classify workers as independent contractors. The changes have broad implications as to whether, under federal law; workers are entitled to minimum wage and overtime pay; employers must comply with recordkeeping requirements for such employees; and payroll taxes such as FICA, workers’ compensation, and unemployment must be paid with respect to these workers. The misclassification of workers as independent contractors also can have dire consequences for employers based on the potential assessment of liquidated (double) damages and attorney’s fees under the Fair Labor Standards Act, particularly where such claims are brought as collective actions. The Department suggests that 10-30% of employers in the private sector are, per the proposed rule, misclassifying employees as contractors.
Continue Reading Employees in Disguise: Proposed Rule Would Roll Back Trump-era Independent Contractor Rule