On May 1, the U.S. Department of Labor announced that it will pause enforcement of the 2024 Employee or Independent Contractor Classification Under the Fair Labor Standards Act final rule in current enforcement matters while the agency reviews this regulation. ABC, its Southeast Texas chapter, the Coalition for Workforce Innovation and five other organizations are currently challenging the 2024 final rule in federal court.

ABC is pleased that the DOL will not apply the Biden administration’s 2024 final rule’s analysis in current enforcement matters. This is welcome news for the many construction employers who depend on legitimate independent contractors to provide specialized skills, entrepreneurial opportunities and stability during fluctuations of work common to the industry, ABC said in a statement.

The Biden administration’s 2024 final independent contractor rule is confusing, vague and unworkable, and harms construction workers classified as independent contractors because they will lose crucial opportunities for work.ABC continues to support reinstatement of the Trump administration’s 2021 final rule, which simplified and clarified the factors for determining when a worker is an independent contractor versus an employee.

Following the DOL’s announcement, ABC’s general counsel Littler Mendelson issued an article, “DOL Hits Pause on Enforcement of Biden-Era Independent Contractor Rule, Suggests New or Changed Rule Forthcoming,” which includes the following information:  

What's the DOL's New Guidepost?
“While the DOL’s review and reconsideration of the rule continues, the Field Assistance Bulletin notes that, effective May 1, 2025, the DOL will enforce the FLSA in accordance with Fact Sheet #13 (from July 2008, not March 2024) and as further informed by the reinstated Opinion Letter FLSA2019-6, which addresses classification in the context of virtual marketplace platforms.”

What Now for Employers?
“Employers should carefully review Fact Sheet 13 (from July 2008) because it varies significantly from the 2024 rule that DOL investigators or others may have been considering as controlling. Employers should also recall the dozens of different standards for independent contractor status under other employment laws, including those at the state and sometimes local level, and remain vigilant in complying with those laws while the DOL continues its review and likely dramatic altering of independent contractor criteria under the FLSA. Experience shows that those other employment laws also have shifting regulations or even statutory changes, so employers should not wait for a ‘quiet time’ in the world of worker classification to evaluate their policies and practices because that time may never arrive.”

For additional guidance beyond the field assistance bulletin, workers and employers can contact the Wage and Hour Division at its toll-free helpline, 866-4US-WAGE (487-9243). 

ABC members are encouraged to reach out to counsel with any questions regarding the DOL’s pause on enforcement of the 2024 independent contractor rule.