On May 1, the U.S. Department of Labor (DOL) Wage and Hour Division (WHD) published Field Assistance Bulletin (FAB) 2025-1, which the agency will use to determine if a worker is an employee or independent contractor for purposes of the Fair Labor Standards Act (FLSA) [WHD, 25-722-NAT, 5-1-25]. FAB 2025-1 supersedes any prior or conflicting guidance provided to WHD staff on enforcement related to independent contractor misclassification.
2024 Rule ‘Under Review’
In January 2024, the DOL issued a final rule that modified how to determine whether a worker is an employee or an independent contractor under the FLSA (89 F.R. 1638, 1-10-24). The 2024 final rule went into effect on March 11, 2024, and formally rescinded the previous rule (86 F.R. 1168, 1-7-21).
The DOL said it is reviewing the 2024 final rule, which is being challenged in several federal courts.
Previous Guidance Reinstated
WHD said its investigators have been directed not to apply the 2024 final rule’s analysis in current enforcement matters while the DOL reviews the rule. Instead, WHD will rely on principles outlined in Fact Sheet #13 (dated July 2008) and the reinstated opinion letter FLSA2019-6, which addresses worker classification in the context of virtual marketplace platforms.
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Rayna Alexander, Esq., is Editor of Payroll Information Resources for PayrollOrg.
