In an ongoing battle over definitions, the Department of Labor has now announced that it is considering a new rule to determine exactly what the words “independent contractor” mean.
Two years ago, the Biden administration implemented a rule under the Fair Labor Standards Act declaring that such contractors should be defined as the regular employees of any given company, eligible for health employee benefits, and subject to federal minimum wage laws.
At the time of that announcement, then-acting Labor Secretary Julie Su remarked that the new rule would “help protect workers, especially those facing the greatest risk of exploitation, by making sure they are classified properly and that they receive the wages they’ve earned.”
That new rule, however, was vigorously opposed by major portions of the construction industry, including the Associated Builders and Contractors, which said it created an “ambiguous and difficult-to-interpret standard for determining independent contractor status.”
Now the Labor Department’s Wage and Hour Division has come forward with a proposed rule that it says will provide clarity in what most parties agree has become a cloudy issue, while also doing away altogether with the Biden-era independent contractor classification.
The new proposed rule, said Labor Secretary Lori Chavez-DeRemer in a statement, “seeks to protect these workers’ entrepreneurial spirit and simplify compliance for American job creators navigating a modern workplace, all while maintaining robust protections for employees under the Fair Labor Standards Act.”
While the revised regulations will very much lay the groundwork for additional Department of Labor actions, exactly how the courts will interpret the new ruling in future litigation remains unknown.
Public comments on the new proposal will be accepted by the Labor Department until April 28.
March 5, 2026
By Garry Boulard
Photo courtesy of the Department of Labor
