Federal: DOL Announces No Enforcement on Biden’s Independent Contractor Rule

What happened?

On May 1, 2025, the U.S. Department of Labor (DOL) announced it will no longer enforce the 2024 rule that redefined how workers are classified as employees or independent contractors under the Fair Labor Standards Act (FLSA). This decision was outlined in Field Assistance Bulletin 2025-1.

Overview:

While the 2024 rule remains in place, the DOL is currently reviewing it and developing a revised standard. In the interim, DOL investigators will use prior guidance—Fact Sheet #13 (2008) and Opinion Letter FLSA2019-6—to assess worker classification.

Purpose of Prior Guidance

• Clarifies the FLSA’s definition of an employment relationship and helps employers avoid misclassifying workers. 
• The fact sheet emphasizes the “economic realities test,” which examines factors like control, investment, and the nature of the work relationship to determine if someone is truly an independent contractor or an employee. 
• The opinion letter aims to address the FLSA’s application to workers in the gig economy, specifically those connected to consumers through virtual marketplace platforms. 

This shift does not change existing law but reflects how the DOL is allocating enforcement resources during the rule’s review. Employers should continue to evaluate worker classifications carefully under the current guidance.

Source References

• DOL Guidance on Independent Contractor Misclassification Enforcement
• DOL Biden Final Rule 2024 – Employee or Independent Contractor Classification Under the Fair Labor Standards Act

Resources

• DOL Acting Administrator Letter – FLSA 2025-2
• DOL Fact Sheet 13 – Employment Relationship Under the Fair Labor Standards Act (FLSA)
• DOL Field Assistance Bulletin 2025-1 (May 1, 2025)

This communication is intended solely for the purpose of conveying information. The present post might incorporate hyperlinks directing readers to websites managed by third-party entities. The inclusion of any links within this communication is meant to serve as points of reference and could encompass opinion articles from various law firms, articles from HR associations, official websites, news releases, and documents of government agencies, and other relevant third-party sources. Vensure has no authority over these external websites and bears no responsibility for their content. Furthermore, Vensure does not endorse the materials present on these websites. The contents of this communication should not be interpreted as legal advice or as a legal standpoint concerning specific facts or scenarios. Nor should it be deemed an exhaustive compilation of facts potentially pertinent to federal, state, or local laws. It is strongly advised that employers solicit legal guidance from an employment attorney when undertaking actions in response to any legal updates provided. This is due to the possibility of future alterations occurring in federal, state, and local laws, regulations, as well as the directives and guidelines issued by governing agencies. These changes may transpire at any given time, potentially rendering certain portions of the content within this update void or inaccurate.