Labor Department revisits employee vs. contractor rule under federal wage laws

The Labor Department proposes replacing its 2024 final rule with an economic-reality framework to classify workers as employees or independent contractors under the Fair Labor Standards Act and related laws, centering on two core factors—the degree of control and the worker’s opportunity for profit or loss—plus additional indicators like skill, permanence, and integration, with actual practice taking precedence over contractual terms. The rule would apply to the FLSA and related statutes including the FMLA and the Migrant and Seasonal Agricultural Worker Protection Act, include eight fact-specific examples, and invite public comment through April 28, 2026, with compliance resources available via the WHD helpline.