The U.S. Department of Labor (DOL) has recently announced through the Unified Regulatory Agenda that it will rescind the 2024 independent contractor final rule issued by the department. The current independent contractor rule is used to assess how a worker should be classified under the Fair Labor Standards Act (FLSA). The 2024 rule adopted a multi-factor totality of the circumstances test for assessing how workers should be classified under the FLSA. In May 2025, the DOL updated its independent contractor guidance, and advised that Wage and Hour staff should use previous agency guidance in reviewing enforcement actions.
The new independent contractor rule that the DOL will issue in the future will likely be more consistent with a deregulatory agenda and will likely deviate from the totality of the circumstances test and will likely adopt a more simplified test for assessing workers under the FLSA.
NAR will continue to provide updates regarding worker classification matters.
US Department of Labor Guidance on Independent Contractor Misclassification Enforcement