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worker was economically dependent on the employer for work or instead in business for themselves. no single factor was determinative.
The DOL issued new regulations on January 7, 2021, during President Donald Trump’ s first term, designating two factors( nature / degree of control and opportunity for profit / loss) as“ core factors.” If both indicated the same classification, the 2021 DOL rule stated there was a“ substantial likelihood” the indicated classification was correct. On January 10, 2024( during President Joe Biden’ s Administration, for those keeping track), the DOL published new regulations reverting back to the traditional economic realities test, where no single factor was determinative or accorded special weight. A number of lawsuits challenging the 2024 rule remain ongoing.
With President Trump back in office, the DOL’ s position shifted once again. The May 1, 2025, bulletin states the DOL will no longer apply the Biden-era 2024 rule, and will instead enforce the FLSA in accordance with DOL Fact Sheet # 13( the July 2008 version, not the updated March 2024 version). The bulletin also incorporates DOL Opinion Letter FLSA2019-6, reissued as FLSA2025-2. Although bulletins do not change the law, they provide direction to DOL staff regarding the analysis they should use while enforcing the law.
The back-and-forth game of regulatory ping pong can be amusing to watch from the sidelines, but the reality is that misclassifying an employee as an independent contractor can have serious repercussions. Employers who get it wrong can be subjected to liability for unpaid overtime, employment taxes, interest, attorneys’ fees, and other penalties. Additionally, an employer that mistakenly assumed a worker was an independent contractor is unlikely to have complied with other legal requirements that typically only
apply to employees related to items such as Form I-9’ s, required notices, or job-protected leave. The need to remain vigilant is particularly important for healthcare entities, where it may be common to have moonlighters and locums work alongside regular employees. Such arrangements may occasionally blur the line between an employee and independent contractor.
Stay tuned for any updates. And if you see a document titled:“ Independent _ Contractor _ Classification _ rule _ Update _ FInAL _ Version _ v4.1.2.1 _( rev._ 1.2024)( re _ rev._ 5.2025),” maybe be prepared for a rere-revised Final Version if the administration changes once again in 2029. n
Author: Jake K. Proudfoot – H. Lee Moffitt Cancer Center and Research Institute, Inc.
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