The Department of Labor’s Wage and Hour Division (WHD) issued a proposed rule to rescind the 2024 Biden-era, SWACCA-supported independent contractor rule and replace it with a framework similar to the Trump Administration’s 2021 standard, reinstating a streamlined “economic reality” test under the Fair Labor Standards Act (FLSA) that emphasizes the nature and degree of control over the work and the worker’s opportunity for profit or loss, while also considering skill, permanence of the relationship, and integration into production. The proposal would apply to the FLSA, Family and Medical Leave Act, and Migrant and Seasonal Agricultural Worker Protection Act. Comments on the proposed rule are due by April 28, 2026. This outcome was something that SWACCA’s policy team had warned about following the Trump Administration’s April 2025 decision to stop defending the Biden-era independent contractor rule in the Fifth and Eleventh Circuit Courts as it reconsidered the rule and after the WHD in May 2025 issued guidance announcing it had ceased enforcement of the 2024 rule.
Separately, the National Labor Relations Board formally reinstated its 2020 joint employer rule after a federal court vacated the Biden-era 2023 standard before it took effect. The 2020 rule requires a company to exercise “substantial direct and immediate” control over another employer’s workers to be deemed a joint employer under federal labor law, and the Board characterized the action as ministerial, updating the Code of Federal Regulations to reflect the court’s ruling while continuing to apply the 2020 standard in recent cases.