DOL pauses enforcement of Biden-era independent contractor rule

The Trump administration continues its roll-back of employment guidance issued by the Biden administration. In early May, it was a reversion—at least from an enforcement standpoint—of Department of Labor (DOL) guidance regarding the appropriate standard to apply when assessing whether a worker is an employee or an independent contractor.

Back and forth

There has been much back and forth on independent contractor status between the Trump and Biden administrations. The current rule was issued by the DOL’s Wage and Hour Division (WHD) in January 2024 and includes a comprehensive, six-prong economic realities test to determine whether workers are independent contractors. That rule was intended largely to alter a 2021 rule issued during the final days of the first Trump administration.

The Biden-era rule is subject to pending legal challenges in at least three federal forums—the U.S. Court of Appeals for the 5th Circuit (whose rulings apply to all employers in Louisiana, Mississippi, and Texas), the 11th Circuit (whose rulings apply to all employers in Alabama, Florida, and Georgia), and a Texas district court.

Effective immediately