The U.S. Department of Labor (DOL) Wage and Hour Division (WHD) recently published Field Assistance Bulletin (FAB) No. 2025-1, FLSA Independent Contractor Misclassification Enforcement Guidance, which provides guidance to WHD field staff on the analysis to apply when determining employee or independent contractor status for purposes of enforcing the Fair Labor Standards Act (FLSA). They also have published Opinion Letter FLSA2025-2, reinstating Opinion Letter FLSA2019-6, which addresses the virtual marketplace.
WHD will no longer apply the Biden administration 2024 Rule’s analysis when determining employee versus independent contractor status in FLSA investigations. They will instead enforce the FLSA in accordance with a previous version of Fact Sheet #13 from 2008 and the opinion letters outlined above.
A number of lawsuits are pending in federal courts challenging the legality of the rule entitled, “Employee or Independent Contractor Classification Under the Fair Labor Standards Act, 89 Fed. Reg. 1638” (2024 Rule), which addresses the analysis for determining employee or independent contractor status under the FLSA. The DOL has taken the position in those lawsuits that it is reconsidering the 2024 Rule, including whether to rescind the regulation. This guidance does not change existing regulations but reflects the DOL’s position while reviewing the 2024 Rule.
AGC Involvement
In April 2024, AGC and other business groups jointly filed a friend-of-the-court brief urging a Texas federal district court to vacate DOL’s final rule (2024) and enjoin the Department from enforcing it, as it fails to address the confusion over the proper classification of independent contractors and will irreparably harm companies employing independent contractors nationwide, and the workers themselves. AGC previously submitted comments on DOL’s proposed rule, opposing the creation of this new standard for independent contractor classification and urging DOL to withdraw the proposal. AGC supported the first Trump administration’s rule that adopted a consistent, clear, and common-sense standard for determining independent contractor status under the FLSA and filed comments opposing the DOL move to withdraw that rule. AGC also supported a Congressional Review Act (CRA) resolution to overturn the independent contractor rule that had been introduced in both Houses of Congress. AGC’s involvement in this case was made possible thanks to your contributions to the Construction Advocacy Fund.
For more information, contact Claiborne Guy at claiborne.guy@agc.org