February 27, 2026
UPDATE: U.S. DOL Publishes Proposed Independent Contractor Rule
On September 24, 2025, the U.S. DOL (DOL) published its Spring Regulatory Agenda indicating it intended to replace the current rule for properly classifying a worker as an independent contractor rather than as an employee.
It’s here! Published in the federal register today, the DOL writes, “The Department is proposing to rescind the analysis for determining employee or independent contractor status under the Fair Labor Standards Act (FLSA) currently set forth in 29 CFR part 795 and replace it with the analysis that it published and adopted in a prior final rule dated January 7, 2021, with a few modifications. In addition, the Department proposes to apply this analysis to the Family and Medical Leave Act (FMLA) and Migrant and Seasonal Agricultural Worker Protection Act (MSPA), both of which incorporate the FLSA’s scope of employment.”
What are the proposed factors for making this analysis? Economic dependence is the ultimate factor. Does the worker depend upon someone else’s business for the opportunity to render service or is the worker in business for him or herself? To make that determination, the DOL would apply two “core factors.” If both point towards the same classification, employee or independent contractor, there is a substantial likelihood that is the individual’s accurate classification. Those core factors are:
- The nature and degree of control the would-be employer has over the worker’s work. With actual practice being the primary focus rather than reserved control.
- The individual’s opportunity for profit or loss. This factor weighs towards the individual being an employee to the extent the individual is unable to affect his or her earnings or is only able to do so by working more hours or faster.
Where the two core factors do not point towards the same classification, the following factors may be applied:
- The amount of skill required for the work. This factor weighs in favor of the individual being an independent contractor to the extent the work at issue requires specialized training or skill that the potential employer does not provide.
- The degree of permanence of the working relationship between the individual and the potential employer. This factor weighs in favor of the individual being an employee to the extent the work relationship is instead by design indefinite in duration or continuous. This factor is my lease favorite. Very few jobs suggest any degree of permanence. That’s why HR professionals replaced the term “permanent” employee with “regular”…30+ years ago?!
- Whether the work is part of an integrated unit of production. This factor weighs in favor of the individual being an employee to the extent his or her work is a component of the potential employer’s integrated production process for a good or service.
- Additional factors. These may be relevant in determining whether an individual is an employee or independent contractor for purposes of the FLSA, but only if the factors in some way indicate whether the individual is in business for him- or herself, as opposed to being economically dependent on the potential employer for work.
Next Steps? The DOL “welcomes” and “seeks” comments on at least 28 aspects of the proposed rule. Search the proposed rule for those key words. The notice and comment period is open through April 28th. I’ll be submitting mine. Click here for instructions to submit yours.
