DOL proposes new independent‑contractor rule
The U.S. Department of Labor issued a 2026 Notice of Proposed Rulemaking that could change how small contractors classify workers—potentially altering payroll, taxes, and hiring for trade firms (jdsupra.com). If finalized, the rule would affect your decisions about hiring helpers versus subcontracting. (jdsupra.com)
The Department of Labor published a Notice of Proposed Rulemaking in the Federal Register on Feb. 27, 2026 as 91 FR 9932, docket no. WHD-2026-0001 and RIN 1235‑AA46. (federalregister.gov)) The agency announced the NPRM on Feb. 26, 2026 and set a public comment deadline of April 28, 2026 at 11:59 p.m. ET for submissions via Regulations.gov. (dol.gov)) The proposal would rescind the Department’s January 2024 independent‑contractor final rule and replace it with an analysis substantially similar to the rule the DOL adopted on Jan. 7, 2021, with specific modifications. (federalregister.gov)) The NPRM centers an “economic reality” test that identifies two “core factors”—the worker’s degree of control over the work and the worker’s opportunity for profit or loss—and lists three additional factors: skill required, degree of permanence, and whether the work is part of an integrated unit of production. (dol.gov)) The Department says it is no longer applying the 2024 rule in its investigations and will provide eight illustrative examples in the NPRM to show how the economic‑reality factors apply in real‑world situations. (dol.gov)) The NPRM explicitly proposes to apply the revised analysis to the Fair Labor Standards Act, the Family and Medical Leave Act, and the Migrant and Seasonal Agricultural Worker Protection Act, and the DOL’s Small Entity Compliance Guide points small businesses to docket WHD‑2026‑0001 for guidance and comment submission. (federalregister.gov)) Labor Secretary Lori Chavez‑DeRemer and Wage and Hour Division Administrator Andrew Rogers framed the proposal as returning to long‑standing judicial principles to help differentiate employees from independent contractors. (dol.gov))
