The U.S. Department of Labor has announced it intends to roll back the 2024 independent contractor rule, according to a document published in the Federal Register.
More specifically, the Wage and Hour Division wants to reintroduce the “economic reality test” to determine whether a worker should be classified as an independent contractor or an employee under the Fair Labor Standards Act (FLSA). That test had been adopted in 2021 during President Donald Trump’s first term.
The department also said it would apply the same analysis when implementing the Family and Medical Leave Act (FMLA) as well as the Migrant and Seasonal Agricultural Worker Protection Act.
If finalized, the proposal would replace the Biden-era “totality-of-the-circumstances” framework introduced in 2024. At the time, SHRM said the 2024 rule “fosters ambiguity,” which could discourage businesses from providing essential training to independent workers—an outcome it described as harmful for both sides.
A 60-day public comment period began Friday and will run through April 28. After that, the Labor Department would need to decide whether to adopt a final rule.
