Labor Dept. Weighs Revamping Worker Classification … Again

Guidance from the Labor Department shows that the administration is reconsidering a 2024 Biden-era rule on worker classification.

In a May 1 memo, the head of the Labor Department’s Wage and Hour Division (WHD) directed staff to cease applying the 2024 rule’s analysis “when determining employee versus independent contractor status” for Fair Labor Standards Act (FLSA) investigations.

The rules governing classification have changed repeatedly between the two administrations. While the rule in Trump’s first term tethered the status to several core factors, the Biden administration replaced it with one emphasizing six factors.

The May 1 memo notes that a number of federal lawsuits are pending that challenge the 2024 rule, and the department “has taken the position in those lawsuits that it is reconsidering the 2024 rule, including whether to rescind the regulation.” It added that the WHD is reviewing the rule “and developing the appropriate standard for determining FLSA employee versus independent contractor status.”

The memo also instructed staff to enforce FLSA using a 2008 fact sheet in conjunction with an opinion letter. The fact sheet outlines seven factors the Supreme Court has considered significant in prior rulings, while the opinion letter detailed the factors more in depth. Neither document specifically invoked the core factors-concept.