Pendulum swings again: DOL’s proposed rule on independent contractors

The legal framework governing worker classification in the United States has undergone significant turbulence over the past five years, leaving businesses to navigate a seemingly ever-changing regulatory environment. Most recently, on February 27, 2026, the U.S. Department of Labor (DOL) published a notice of proposed rulemaking that would alter the analysis for determining whether a worker should be classified as an independent contractor or an employee under the federal Fair Labor Standards Act (FLSA).

How the test has changed over time

To understand the significance of the 2026 proposed rule and the potential impact it may have on businesses and workers alike, it’s helpful to understand the developments in the analysis over the years. This is by no means a new issue. In the 1947 Rutherford Food Corp. v. McComb case, the U.S. Supreme Court grappled with whether to classify slaughterhouse workers as independent contractors or employees under the FLSA. The Court adopted a “totality of the circumstances” analysis aimed at determining whether the economic realities suggested that the workers were employees and, as such, were covered by the FLSA’s minimum wage and overtime protections.