DOL signals return to employer-friendly worker classification standards

Surging changes to workplace laws understandably have employers suffering from whiplash. Historically, employment laws have shifted when presidential administrations have changed. A May 1, 2025, announcement by the U.S. Department of Labor (DOL) about its intended approach to the classification of individuals as independent contractors is a recent example.

Background on independent contractors

A number of operational and economic considerations can encourage employers to classify workers who are performing services on their behalf as independent contractors rather than employees. Unlike employees, independent contractors are generally not covered by the business’s benefits plans, workers’ compensation coverage, and unemployment insurance. Typically, no withholdings—taxes or otherwise—are deducted from independent contractors’ earnings. Additionally, for purposes of the Fair Labor Standards Act (FLSA), overtime and minimum wage requirements don’t apply.

Improperly classifying an employee as an independent contractor can pose significant financial consequences and litigation risks for employers, so getting this step right is critical. Let’s look at how the standard for classifying workers has changed over the last several years and where we stand today.

Independent contractors: 2021 to 2024