The DOL Issues Guidance on Independent Contractor Misclassification

The U.S. Department of Labor (DOL) recently issued Field Assistance Bulletin (FAB) 2025-1 on how to determine employee or independent contractor status when enforcing the Fair Labor Standards Act (FLSA). In summary, the Trump DOL will not enforce the 2024 final rule and is likely to be more flexible regarding employer classifications of workers as independent contractors.

Note that the DOL’s guidance does not change existing regulations but reflects how the department is allocating enforcement resources during the current review of the 2024 final rule. Several lawsuits are pending in federal courts challenging the 2024 final rule. In those lawsuits, the DOL has taken the position that it is reconsidering the final rule, including whether to rescind it.

As a refresher, the 2024 (and current) final rule issued under the Biden DOL relies on a multifactor, totality-of-the-circumstances analysis to assess whether a worker is an employee or an independent contractor and generally results in classifying more workers as employees than the 2021 rule under the Trump DOL.