DOL Punts on Biden-Era Independent Contractor Regulation

The Department of Labor (DOL) will cease enforcement of the Biden administration’s independent contractor rule as it inches towards rescinding and replacing it entirely.

The bottom line: While the administration has not yet rescinded the Biden-era rule, which would require formal rulemaking, Deputy Labor Secretary Keith Sonderling made it abundantly clear that the Department would no longer enforce the rule.

Background: The Biden administration’s rule has been nominally in effect since March 2024, though it has faced ongoing litigation. The Trump administration first signaled its intent to abandon that rule when it declined to defend it in court.

No new rule? Sonderling announced that the Department would instead “rely on longstanding principles” outlined in an opinion letter issued under the first Trump administration. That opinion letter emphasizes “economic dependence” as determined through a traditional six factor test as the primary measuring stick for contractor status.

• The opinion letter and accompanying fact sheet make it clear that the scope of independent contractor status will be much broader under the current administration than under the Biden administration.

• While the Trump administration may issue a new rule after formally rescinding the Biden-era one, the pivot to opinion letters signals that they may instead rely on using such letters over formal rulemaking.

  • Opinion letters are quicker and more flexible but theoretically provide less clarity to employers (absent soliciting their own letter). In addition, letters are more easily rescinded by future administrations.

Employer takeaways:

• The sunset of the Biden-era rule is a welcome change for employers given its strict approach to worker classification (which was also maddeningly vague).

• Employers can expect the current administration to be more flexible on classification issues, even if a new rule is never issued.

• Employers may want to consider soliciting their own opinion letters from DOL if they have particularly thorny classification questions.

• Sonderling has made it clear that the agency will seek to provide compliance assistance to employers over strict enforcement in most cases.